Petition for Writ of Certiorari — U.S. Well Services, Inc., Petitioner v. Scott Easom, et al.
Supreme Court briefOct 5, 2022
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APPENDIX
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APPENDIX
TABLE OF CONTENTS
Appendix A – Opinion of the United States Court of
Appeals for the Fifth Circuit (June 15, 2022) ......... 1a
Appendix B – Judgment of the United States Court of
Appeals for the Fifth Circuit (July 15, 2022) ........ 16a
Appendix C – Opinion on Reconsideration of the
United States District Court for the Southern District
of Texas (March 19, 2021) ...................................... 18a
Appendix D – Opinion of the United States District
Court for the Southern District of Texas (February 10,
2021) ........................................................................ 58a
Appendix E – Order Denying Rehearing (July 11,
2022) ........................................................................ 89a
1a
APPENDIX A
UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT
No. 21-20202
[Filed June 15, 2022]
SCOTT EASOM; ADRIAN HOWARD; JOHN NAU,
Plaintiffs—Appellants,
versus
US WELL SERVICES, INCORPORATED,
Defendant—Appellee
Appeal from the United States District Court for the
Southern District of Texas USDC No. 4:20-CV-2995
Before STEWART, CLEMENT, and ELROD, Circuit
Judges.
CARL E. STEWART, Circuit Judge:
Scott Easom, Adrian Howard, and John Nau
(collectively, “Appellants”) filed this interlocutory
appeal seeking reversal of the district court’s order
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denying their motions for summary judgment and
reconsideration. In its order denying Appellants’
motions, the district court certified two questions for
interlocutory appeal: (1) Does COVID-19 qualify as a
natural disaster under the Worker Adjustment and
Retraining Notification Act’s (“WARN Act” or “the Act”)
natural-disaster exception, 29 U.S.C. § 2102(b)(2)(B)?;
(2) Does the WARN Act’s natural-disaster exception, 29
U.S.C. § 2102(b)(2)(B), incorporate but-for or proximate
causation?
In response, we hold that the COVID-19
pandemic is not a natural disaster under the WARN Act
and that the natural-disaster exception incorporates
proximate causation. We therefore REVERSE and
REMAND for proceedings consistent with this opinion.
I. FACTS & PROCEEDINGS
Appellants filed a class action complaint against
their former employer, US Well Services, Inc. (“US
Well”) for allegedly violating the WARN Act by
terminating them without advance notice. The WARN
Act requires covered employers to give affected
employees sixty days’ notice before a plant closing or
mass layoff. 29 U.S.C. § 2102(a). The Act provides three
exceptions to the notice requirement—including the
natural-disaster exception, under which no notice is
required. Id. § 2102(b).
By way of background, oil producers hire US Well
to perform hydraulic fracturing services known as
fracking. When the price of oil drops below a
commercially viable price, oil producers—including
those that hire US Well—often discontinue work. In
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early March 2020, oil prices plummeted to historic lows
due to a price conflict between Saudi Arabia and Russia.
This effect was compounded by a decline in travel and
decreased demand for oil and gas during the COVID-19
pandemic. As a result, several of US Well’s customers
curtailed or completely shut down the fracking work US
Well had been performing at multiple well sites in
Texas. When crew members, including Appellants,
returned from the well sites to their respective
headquarters after shutting down operations, they were
immediately informed that they were laid off.
Appellants’ termination letters, dated March 18, 2020,
and effective immediately, stated: “Your termination of
employment is due to unforeseeable business
circumstances resulting from a lack of available
customer work caused by the significant drop in oil
prices and the unexpected adverse impact that the
Coronavirus has caused.”
Appellants filed this suit on August 26, 2020, and
amended their complaint on October 14, 2020. The
parties cross-moved for summary judgment. US Well
argued that COVID-19 was a natural disaster under the
WARN Act, and consequently, that it was exempt from
the WARN Act’s notice requirement pursuant to the
natural-disaster exception. Appellants countered that
COVID-19 was not a natural disaster and was not a
direct cause of their layoffs. The district court concluded
that COVID-19 was a natural disaster and that the
natural-disaster exception uses but-for causation
standards. It denied both motions for summary
judgment, however, on grounds that the record did not
show whether COVID-19 was the but-for cause of the
layoffs. Appellants moved for reconsideration or, in the
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alternative, certification of three questions for
interlocutory appeal. The district court denied the
motion for reconsideration but certified two questions
for interlocutory appeal: (1) Does COVID-19 qualify as a
natural disaster under the WARN Act’s naturaldisaster exception?; (2) Does the WARN Act’s naturaldisaster exception incorporate but-for or proximate
causation?
II. STANDARD OF REVIEW
“Although we ordinarily review a district court’s
summary judgment ruling de novo, our appellate
jurisdiction under § 1292(b) extends only to controlling
questions of law, thus, we review only the [questions] of
law certified for appeal.” Tanks v. Lockheed Martin
Corp., 417 F.3d 456, 461 (5th Cir. 2005). We do not
review whether either party has shown “that there is [a]
genuine dispute as to any material fact” under Rule 56.
FED. R. CIV. P. 56(a); see La. Patients’ Comp. Fund
Oversight Bd. v. St. Paul Fire & Marine Ins. Co., 411
F.3d 585, 588 (5th Cir. 2005); Malbrough v. Crown
Equip. Corp., 392 F.3d 135, 136 (5th Cir. 2004). Instead,
we determine de novo whether the district court
properly interpreted the WARN Act’s natural-disaster
exception. See Tanks, 417 F.3d at 461.
III. ANALYSIS
The WARN Act prohibits an employer from
ordering “a plant closing or mass layoff until the end of
a [sixty]-day period after the employer serves written
notice of such an order” to affected employees. 29 U.S.C.
§ 2102(a). Employers who violate § 2102 are required to
provide aggrieved employees “back pay for each day of
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violation.” Id. § 2104(a)(1)(A). “To prove a WARN Act
claim, a plaintiff must demonstrate that: (1) the
defendant was ‘an employer’; (2) the defendant ordered
a ‘plant closing’ or ‘mass layoff’; (3) the defendant failed
to give to the plaintiff sixty days[’] notice of the closing
or layoff; and (4) the plaintiff is an ‘aggrieved’ or
‘affected’ employee.” In re TWL Corp., 712 F.3d 886, 897
(5th Cir. 2013) (quoting §§ 2102, 2104).
“If a plaintiff establishes these requirements, the
employer may avoid liability by proving that it qualifies
for the Act’s ‘faltering company’ exemption, or that the
closing or layoff resulted from ‘unforeseen business
circumstances’ or a ‘natural disaster.’” Id. at 897–98
(citing 20 C.F.R. § 639.9 (1989)). Relevant here, the
WARN Act’s natural-disaster exception provides that
“[n]o notice under this chapter shall be required if the
plant closing or mass layoff is due to any form of natural
disaster, such as a flood, earthquake, or the drought
currently ravaging the farmlands of the United States.”
29 U.S.C. § 2102(b)(2)(B).
Section 2107(a) of the WARN Act requires the
Secretary of Labor to “prescribe such regulations as may
be necessary to carry out this chapter.” 29 U.S.C. §
2107(a). “Such regulations shall, at a minimum, include
interpretative regulations describing the methods by
which employers may provide for appropriate service of
notice as required by this chapter.” Id. To that end, the
Department of Labor has explained the following
regarding the natural-disaster exception to the notice
requirement:
(1) Floods, earthquakes, droughts,
storms, tidal waves or tsunamis and
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similar effects of nature are natural
disasters under this provision.
(2) To qualify for this exception, an
employer must be able to demonstrate
that its plant closing or mass layoff is a
direct result of a natural disaster.
(3) While a disaster may preclude full or
any advance notice, such notice as is
practicable, containing as much of the
information required in [20 C.F.R.] §
639.7 as is available in the
circumstances of the disaster still must
be given, whether in advance or after the
fact of an employment loss caused by a
natural disaster.
(4) Where a plant closing or mass layoff
occurs as an indirect result of a natural
disaster, the exception does not apply
but
the
“unforeseeable
business
circumstance” exception described in
paragraph (b) of this section may be
applicable.
20 C.F.R. § 639.9(c)(1)–(4) (the “DOL regulation”).
Further, the Department of Labor has clarified that
“[t]he employer bears the burden of proof that conditions
for the exceptions have been met.” Id. § 639.9. We now
turn to the certified questions.
A. Whether COVID-19 qualifies as a natural disaster
under the WARN Act’s natural-disaster exception
Appellants argue that COVID-19 does not qualify
as a natural disaster under the WARN Act. We agree.
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When interpreting a statute, a court must “start
with the specific statutory language in dispute.” Murphy
v. Smith, 138 S. Ct. 784, 787 (2018). “A fundamental
canon of statutory construction is that, unless otherwise
defined, words will be interpreted as taking their
ordinary, contemporary, common meaning.” Perrin v.
United States, 444 U.S. 37, 42 (1979).
Because the WARN Act does not define “natural
disaster,” we turn to the “ordinary meaning of the word
. . . as understood when the [Act] was enacted.” See
Carcieri v. Salazar, 555 U.S. 379, 388 (2009).
“Ordinarily, a word’s usage accords with its dictionary
definition.” Yates v. United States, 574 U.S. 528, 537
(2015). “But we do not ‘make a fortress out of the
dictionary.’” Chapman v. Durkin, 214 F.2d 360, 362 (5th
Cir. 1954) (quoting Farmers Reservoir & Irrigation Co.
v. McComb, 337 U.S. 755, 764 (1949)).
When the WARN Act was enacted in 1988, the
term “natural disaster” was not yet defined in leading
dictionaries. See, e.g., WEBSTER’S NEW WORLD
DICTIONARY (3d coll. ed. 1988); THE RANDOM HOUSE
DICTIONARY OF THE ENGLISH LANGUAGE (2d unabridged
ed. 1987), WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY OF THE ENGLISH LANGUAGE (1976). So, our
dictionary-based analysis of the term is limited to
combining two component definitions. Taking the terms
in isolation, “natural” was defined as “of or arising from
nature; in accordance with what is found or expected in
nature” and “produced or existing in nature; not
artificial or manufactured.” Natural, WEBSTER’S NEW
WORLD DICTIONARY (3d coll. ed. 1988). “Disaster” was
defined as “any happening that causes great harm or
damage; serious or sudden misfortune; calamity.”
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Disaster, WEBSTER’S NEW WORLD DICTIONARY (3d coll.
ed. 1988). The district court reasoned that COVID-19
qualified as “natural” because human beings did not
start or consciously spread it. Easom v. US Well Servs.,
Inc., 527 F. Supp. 3d 898, 908 (S.D. Tex. 2021). It further
reasoned that COVID-19 qualified as a “disaster” based
on how many people were killed or infected by the virus.
Id. Although the dictionary definitions of the words
“natural” and “disaster” bear consideration, they are not
dispositive of the meaning of “natural disaster” in the
WARN Act. See Yates, 574 U.S. at 538.
To supplement our combined dictionary
definition of “natural disaster,” we consider the term’s
statutory context. See Robinson v. Shell Oil Co., 519
U.S. 337, 341 (1997) (“The plainness or ambiguity of
statutory language is determined by reference to the
language itself, the specific context in which that
language is used, and the broader context of the statute
as a whole.”). The natural-disaster exception provides
that “[n]o notice under this chapter shall be required if
the plant closing or mass layoff is due to any form of
natural disaster, such as a flood, earthquake, or the
drought currently ravaging the farmlands of the United
States.” 29 U.S.C. § 2102(b)(2)(B) (emphasis added).
Congress’s use of the term “such as” “indicat[es] that
there are includable other matters of the same kind
which are not specifically enumerated by the standard.”
Donovan v. Anheuser-Busch, Inc., 666 F.2d 315, 327 (8th
Cir. 1981) (relying on dictionaries from 1967 to 1971).
By providing three examples after “such as,” Congress
indicated that the phrase, “natural disaster” includes
events of the same kind as floods, earthquakes, and
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droughts. Traditional canons of statutory construction
further support this interpretation.
In the proceedings below, Appellants argued that
the district court should apply the canon of noscitur a
sociis. Noscitur a sociis means “it is known by its
associates.” Graham Cnty. Soil & Water Conservation
Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 287 (2010). This
canon “counsels that a word is given more precise
content by the neighboring words with which it is
associated.” United States v. Williams, 553 U.S. 285, 294
(2008). The district court rejected Appellants’ argument
on grounds that the phrase, “any form of natural
disaster” signaled intentional breadth. Easom, 527 F.
Supp. 3d at 910. But the Supreme Court has applied
noscitur a sociis even where a list begins with the word
“any,” 1 thus, we apply that canon here. Courts rely on
the canon of noscitur a sociis to “avoid ascribing to one
word a meaning so broad that it is inconsistent with its
accompanying words, thus giving unintended breadth to
the Acts of Congress.” Yates, 574 U.S. at 543. Applying
noscitur a sociis to this case, the appearance of “natural
disaster” in a list with “flood, earthquake, or drought”
suggests that Congress intended to limit “natural
disaster” to hydrological, geological, and meteorological
events.
See, e.g., Yates v. United States, 574 U.S. 528, 544 (2015)
(holding that fish were not included within the term “tangible
object” under the Sarbanes-Oxley Act because “tangible object”
appeared in a list that began “any record [or] document” and thus
must refer to tangible objects used to record or preserve
information).
1
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The canon of expressio unius est exclusio is also
helpful here. It means that where, as here, “the items
expressed are members of an ‘associated group or
series,’ [that] justif[ies] the inference that items not
mentioned were excluded by deliberate choice, not
inadvertence.” Barnhart v. Peabody Coal Co., 537 U.S.
149, 168 (2003). By the late 1980s, Congress was
familiar with pandemics and infectious diseases—for
instance, H1N1 (1918), H2N2 (1957¬1958), and H3N2
(1968). See Past Pandemics, CTRS. FOR DISEASE
CONTROL & PREVENTION
(Aug.
10,
2018),
https://www.cdc.gov/flu/pandemic-resources/basics/
past-pandemics.html.
As early as 1938, Congress specified coverage for
“plant disease” in the Federal Crop Insurance Act,
which authorized federal crop insurance to help
agriculture recover after the Dust Bowl. 7 U.S.C. §
1508(g)(5)(A). So, by the time agriculture was hit by the
North American drought of 1988, Congress knew how
to, and could have, included terms like disease,
pandemic, or virus in the statutory language of the
WARN Act. That it chose not to justifies the inference
that those terms were deliberately excluded. See
Barnhart, 537 U.S. at 168.
Finally, we recognize that the WARN Act was
“adopted in response to the extensive worker dislocation
that occurred in the 1970s and 1980s.” Hotel Emps. &
Rest. Emps. Int’l Union Loc. 54 v. Elsinore Shore Assocs.,
173 F.3d 175, 182 (3d Cir. 1999). Under the Act,
employers are required to provide notice to employees
and to local government agencies to allow “some
transition time to adjust to the prospective loss of
employment, to seek and obtain alternative jobs and, if
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necessary, to enter skill training or retraining that will
allow these workers to successfully compete in the job
market.” 20 C.F.R. § 639.1(a). This court has observed
that the WARN Act’s exceptions permitting a reduction
of the notice period run counter to the Act’s remedial
purpose and thus, are to be “narrowly construed.”
Carpenters Dist. Council of New Orleans v. Dillard Dep’t
Stores, Inc., 15 F.3d 1275, 1282 (5th Cir. 1994); see also
San Antonio Sav. Ass’n v. Comm’r, 887 F.2d 577, 586
(5th Cir. 1989) (noting the “general principle of narrow
construction of exceptions”). We therefore decline to
expand the definition of “natural disaster” beyond what
is justified by the Act’s statutory language, context, and
purpose.
Accordingly, we hold that COVID-19 does not
qualify as a natural disaster under the WARN Act’s
natural-disaster exception.
B. Whether the WARN Act’s natural-disaster exception
incorporates but-for or proximate causation
Appellants contend that the phrase “due to” in
the natural-disaster exception requires proximate
cause. In the alternative, they argue that the phrase,
“due to” is ambiguous and that this court should thus
defer to the DOL regulation requiring an employer to
“demonstrate that its plant closing or mass layoff is a
direct result of a natural disaster.” 20 C.F.R. §
639.9(c)(2). We agree that deference is appropriate here.
We first consider “whether Congress has directly
spoken to the precise question at issue,” here, whether
the phrase “due to” in the natural- disaster exception
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requires but-for or proximate causation. 2 See Chevron,
U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837,
842 (1984). Congress has not. When “the court
determines Congress has not directly addressed the
precise question at issue, the court does not simply
impose its own construction on the statute, as would be
necessary in the absence of an administrative
interpretation.” Id. at 843. “Rather, if the statute is
silent or ambiguous with respect to the specific issue,
the question for the court is whether the agency’s
answer is based on a permissible construction of the
statute.” Id. “If Congress has explicitly left a gap for the
agency to fill, there is an express delegation of authority
to the agency to elucidate a specific provision of the
statute by regulation.” Id. at 843–44. “Such legislative
regulations are given controlling weight unless they are
2 The district court began its causation analysis by reasoning that
“due to” means “because of.” Easom, 527 F. Supp. 3d at 912. It
then cited Bostock v. Clayton County, 140 S. Ct. 1731, 1739
(2020), Safeco Insurance Co. of America v. Burr, 551 U.S. 47, 64
n.14 (2007), and Burrage v. United States, 571 U.S. 204, 214
(2014), where the Supreme Court stated that “because of”
incorporates but-for causation. But none of those cases held that
“because of” necessarily excluded proximate causation. Indeed,
neither Bostock nor Safeco mention proximate causation. The
Sixth, Tenth, and D.C. Circuits have concluded that the phrase,
“due to” is ambiguous. See U.S. Postal Serv. v. Postal Regulatory
Comm’n, 640 F.3d 1263, 1268 (D.C. Cir. 2011); Kimber v. Thiokol
Corp., 196 F.3d 1092, 1100 (10th Cir. 1999); Adams v. Director,
OWCP, 886 F.2d 818, 821 (6th Cir. 1989). Specifically, the D.C.
Circuit has observed that “[t]he phrase ‘due to’ is ambiguous
[because it] ‘has been given a broad variety of meanings in the
law ranging from sole and proximate cause at one end of the
spectrum to contributing cause at the other.’” U.S. Postal Serv.,
640 F.3d at 1268 (quoting Kimber, 196 F.3d at 1100). We are
persuaded by this reasoning and conclude the same.
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arbitrary, capricious, or manifestly contrary to the
statute.” Id. at 844.
In light of these principles, we recognize that
Congress explicitly left a gap for the Department of
Labor to fill by requiring the Secretary of Labor to
“prescribe such regulations as may be necessary to carry
out [the WARN Act].” 29 U.S.C. § 2107(a). The
Department of Labor’s interpretation is not arbitrary,
capricious, or manifestly contrary to the Act. Thus, we
give controlling weight to the DOL regulation, 20 C.F.R.
§ 639.9(c)(2): “To qualify for [the natural-disaster]
exception, an employer must be able to demonstrate
that its plant closing or mass layoff is a direct result of
a natural disaster.”
Supreme Court and Fifth Circuit precedent
equate direct causation and proximate causation. See,
e.g., Paroline v. United States, 572 U.S. 434, 444 (2014)
(“The idea of proximate cause . . . . generally ‘refers to
the basic requirement that . . . there must be “some
direct relation between the injury asserted and the
injurious conduct alleged[.]” ’ ”); Dixie Pine Prods. Co. v.
Md. Cas. Co., 133 F.2d 583, 585 (5th Cir. 1943) (“It is
well settled that the words ‘direct cause’ ordinarily are
synonymous in legal intendment with ‘proximate
cause[.]’ ”). This precedent leads us to the conclusion
that the DOL regulation’s “direct result” requirement
imposes proximate causation.
US Well argues that the DOL regulation’s direct
causation requirement would require the natural
disaster to be the sole cause of the mass layoff and would
foreclose the application of the natural-disaster
exception in any case with an intermediate event
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between the natural disaster and the layoff. It points to
instances such as when a hurricane causes a power
outage, which in turn causes layoffs, or when Hurricane
Katrina caused a breach of the levees, which in turn
caused the city of New Orleans to flood and forced
businesses to shut down. But this argument belies
traditional proximate cause principles.
The Supreme Court has explained that “[a]s a
general matter, to say one event proximately caused
another is a way of making two separate but related
assertions.” Paroline, 572 U.S. at 444. “First, it means
the former event caused the latter.” Id. “This is known
as actual cause or cause in fact.” Id. Second, “[e]very
event has many causes . . . and only some of them are
proximate”—to wit, those “with a sufficient connection
to the result.” Id. So proximate cause is not synonymous
with sole cause. A proximate cause requirement merely
“serves, inter alia, to preclude liability in situations
where the causal link between conduct and result is so
attenuated that the consequence is more aptly described
as mere fortuity.” Id. at 445.
Under Texas law, “there can be more than one
proximate cause of an injury,” but “a new and
independent, or superseding, cause may ‘intervene[]
between the original wrong and the final injury such
that the injury is attributed to the new cause rather
than the first and more remote cause.’” Stanfield v.
Neubaum, 494 S.W.3d 90, 97 (Tex. 2016) (alteration in
original) (citation omitted). “In assessing whether an
intervening cause disrupted the causal connection
between the [initial cause] and the plaintiff’s harm and
constitutes a new and independent cause, [Texas courts]
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consider a variety of factors, including foreseeability.”
Id. at 98.
Here, flooding, power outages, layoffs, and
shutdowns are among the reasonably foreseeable
consequences of hurricanes and other natural disasters.
Thus, imposing a proximate cause requirement on
employers that must lay off employees due to a natural
disaster would not foreclose the natural-disaster
exception for all cases involving an intermediate cause.
Accordingly, based on the DOL regulation’s
“direct result” requirement and binding precedent
equating direct cause with proximate cause, we hold
that the WARN Act’s natural-disaster exception
incorporates proximate causation.
IV. CONCLUSION
For the reasons set forth above, we REVERSE
the order of the district court and REMAND for further
proceedings consistent with this opinion.
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________________________________________
APPENDIX B
________________________________________
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 21-20202
[Filed July 15, 2022]
SCOTT EASOM; ADRIAN HOWARD; JOHN NAU,
Plaintiffs—Appellants,
versus
US WELL SERVICES, INCORPORATED,
Defendant—Appellee
Appeal from the United States District Court for the
Southern District of Texas USDC No. 4:20-CV-2995
Before STEWART, CLEMENT, and ELROD, Circuit
Judges.
JUDGMENT
This cause was considered on the record on
appeal and was argued by counsel.
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IT IS ORDERED and ADJUDGED that the
judgement of the District Court is REVERSED, and the
cause is REMANDED to the District Court for further
proceedings in accordance with the opinion of this
Court.
IT IS FURTHER ORDERED that Appellee pay
the Appellants the costs on appeal to be taxed by the
Clerk of this Court.
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________________________________________
APPENDIX C
________________________________________
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Civil Action No. H-20-2995
[Filed March 19, 2021]
SCOTT EASOM; et al Plaintiff,
versus
US WELL SERVICES, INC., Defendant
MEMORANDUM OPINION AND ORDER ON
SUMMARY JUDGMENT, DENYING
RECONSIDERATION, AND CERTIFYING FOR
INTERLOCUTORY APPEAL
After the court denied cross-motions for summary
judgment in this Worker Retraining and Notification
Act dispute, the plaintiffs moved for reconsideration and
moved in the alternative to certify questions for an
interlocutory appeal. (Docket Entry No. 35). The
defendant filed a response. (Docket Entry No. 36). This
court’s prior memorandum and order, (Docket Entry No.
33), is withdrawn and the following memorandum and
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order is substituted in its place. This memorandum
opinion and order addresses new arguments raised in
the plaintiffs’ motion for reconsideration and alternative
motion to certify questions for interlocutory appeal.
(Docket Entry No. 35).
It’s been a bad year for the oil business. In early
March 2020, a price war between Saudi Arabia and
Russia drove oil prices down, decreasing the demand for
oil-field fracking services. US Well Services, Inc. felt
these effects and began cutting costs and laying off
employees. Less than two weeks later, the COVID-19
pandemic was declared a national emergency. Air travel
steeply declined. Manufacturing plants reduced
production. Many people worked from home or lost their
jobs, emptying downtown business districts. Oil prices
declined, reflecting the drop in demand for petroleum
products to fly planes, run factories, and power cars for
people commuting to and from work each day. Fracking
became even more economically unfeasible. On March
18, 2020, US Well Services laid off many of its
employees.
Before these layoffs, US Well Services employees
Scott Easom, John Nau, and Adrian Howard were
working on oil-drilling sites in Texas. When they
finished their work and returned from the field on
March 18, 2020, they received verbal and written notice
that their employment was terminated. They sued US
Well Services, alleging that it violated the Worker
Adjustment and Retraining Notification (WARN) Act by
failing to give them 60-days’ notice before terminating
them as part of the mass layoff. Less than three months
later, US Well Services moved for summary judgment,
arguing that it was not required to give employees prior
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notice of the layoffs because the WARN Act provides an
exception for mass layoffs caused by a natural disaster.
US Well Services argues that the COVID-19 pandemic
excuses it from the 60-day notice requirement.
Few cases have interpreted the WARN Act’s
natural-disaster exception. There is little authority on
the definition of natural disaster; whether the natural
disaster must be the but-for or proximate cause of the
layoff; whether some kind of notice is required under
this exception; and, if so, what kind of notice suffices.
This legal uncertainty is compounded by the factual
uncertainty on this thin record over what events,
together or separately, caused the company’s mass
layoffs during the first quarter of 2020. The price war
between Russia and Saudi Arabia and the COVID-19
pandemic both impacted the demand for oil, spot oil
prices, and the demand for fracking. But the causal links
between COVID-19, the decline in oil prices, and the US
Well Services layoffs are unclear. Because a fuller record
is needed to answer these questions reliably and
accurately, the court denies both parties’ motions for
summary judgment and denies the plaintiffs’ motion for
reconsideration. The court grants the plaintiffs’ motion
to certify questions for interlocutory appeal. The reasons
for this ruling are explained below.
I.
Background
US Well Services is a hydraulic fracturing
company. (Docket Entry No. 21-1 at 1). Oil producers
hire US Well Services to frack well sites that have
already been drilled. (Id. at 2). The crews fracking at
well sites typically include equipment operators,
electronics technicians, a crew supervisor, an engineer,
21a
and mechanics to maintain the fracking machinery.
(Id.). Once a fracking job is complete, the crews spend
two to three days taking down the equipment to use at
another site. (Id.).
When spot prices for oil drop below a level at
which fracking is commercially viable, oil producers
typically discontinue significant aspects of their work
and do not demand fracking services from companies
like US Well Services. (Id.). In January and February
2020, oil prices were between $45.00 and $60.00 per
barrel. (Docket Entry No. 21 at 7). Fracking was viable
at those prices. (Id. at 3). Some sources predicted oil
prices would continue to increase in 2020. (Id. at 87–89).
US Well Services increased its workforce in January and
February 2020. (Id. at 3).
On March 9, 2020, the price of oil dropped to
$31.05 per barrel. (Id. at 4). Eleven days later, the price
dropped below $20.00 per barrel. (Id. at 7). On March 18,
2020, the plaintiffs returned from the field and were told
not to come back. (Id. at 96–98). In April 2020, oil prices
dropped below $0 per barrel before recovering to roughly
$30.00 four weeks later. (Id. at 7).
The parties dispute the primary cause of the
decline in oil prices and the link to the layoffs. US Well
Services points to sources from the International Energy
Agency stating that the COVID-19 pandemic was
responsible for the “sharp downgrade” in the demand for
oil in early March 2020 and after. (Docket Entry No. 211 at 92). US Well Services points to other oil services
companies that filed for bankruptcy because of “a severe
cut in demand and cash crunch due to the coronavirus
pandemic.” (Id. at 95).
22a
The plaintiffs submitted evidence showing that
the drop in oil prices began on March 9, 2020, shortly
before the President declared the COVID-19 pandemic a
national emergency. The plaintiffs argue that the
decline was initially caused by “a price war,” beginning
on March 8, 2020, between Saudi Arabia and Russia.
(Docket Entry No. 23-3). The plaintiffs also point to
public statements from the president and CEO of US
Well Services on March 20, 2020, that mentioned layoffs
as a cost-saving measure but did not refer to the COVID19 pandemic as playing a role. (Docket Entry No. 23-5).
The plaintiffs submitted other reports, dated before
March 2020, predicting that the COVID-19 pandemic
would cause only a small drop in oil prices. (Docket
Entry No. 23-7).
In early March 2020, some US Well Services
customers began discontinuing fracking orders at their
well sites. (Id. at 4). US Well Services crew members
who were working at these well sites stopped fracking,
shut down their field operations, and packed up the
fracking equipment. (Id. at 5). US Well Services could
not find other customers for fracking services. (Id. at 4–
5). During this period, US Well Services terminated
several high-ranking management officials and
administrative staff and reduced pay across the board
for its employees. (Id. at 5).
The plaintiffs—Scott Easom, John Nau, and
Adrian Howard—were working at different facilities in
Texas. On March 18, 2020, US Well Services informed
them, verbally and in writing, that they were laid off.
(Id. at 5, 96–98). US Well Services told the plaintiffs that
the layoffs were “due to unforeseeable business
circumstances resulting from a lack of available
23a
customer work caused by the significant drop in oil
prices and the unexpected adverse impact that the
Coronavirus has caused.” (Id. at 96, 97, 98).
In August 2020, Easom, Nau, and Howard,
representing themselves and seeking to represent a
class of similarly situated employees, sued US Well
Services for alleged violations of the WARN Act. (Docket
Entry No. 1, 10). In November 2020, US Well Services
moved for summary judgment, arguing that it qualified
for the WARN Act’s natural-disaster exception because
the COVID-19 pandemic caused the layoffs. (Docket
Entry No. 21). The plaintiffs opposed the motion for
summary judgment and filed what closer inspection
revealed to be a cross-motion, arguing that US Well
Services did not qualify for the natural-disaster
exception. (Docket Entry No. 23).
This court denied both parties’ motions for
summary judgment. (Docket Entry No. 33). The
plaintiffs filed a motion for reconsideration, raising new
arguments not included in their original summary
judgment motion. The court’s substituted opinion
addresses these new arguments.
II.
The Legal Standards and the Summary Judgment
Record
A.
Motion for Summary Judgment
“Summary judgment is appropriate only if there
is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Vann
v. City of Southaven, Miss., 884 F.3d 307, 309 (5th Cir.
2018) (per curiam) (quotation marks omitted); Fed. R.
Civ. P. 56(a). “A genuine dispute of material fact exists
24a
if a reasonable jury could enter a verdict for the nonmoving party.” Doe v. Edgewood Indep. Sch. Dist., 964
F.3d 351, 358 (5th Cir. 2020). The moving party “bears
the initial responsibility of . . . demonstrat[ing] the
absence of a genuine issue of material fact,” Jones v.
United States, 936 F.3d 318, 321 (5th Cir. 2019) (citation
omitted), and “identifying those portions of [the record]
which it believes demonstrate the absence of a genuine
issue of material fact,” Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986).
“Where the nonmovant bears the burden of proof
at trial, the movant may merely point to an absence of
evidence, thus shifting to the non-movant the burden of
demonstrating by competent summary judgment proof
that there is an issue of material fact warranting trial.”
Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 301–02
(5th Cir. 2020) (citation and quotation marks omitted).
While the party moving for summary judgment must
demonstrate the absence of a genuine and material
factual dispute, it does not need to negate the elements
of the nonmovant’s case. Austin v. Kroger Tex., LP, 864
F.3d 326, 335 (5th Cir. 2017) (per curiam) (quoting Little
v. Liquid Air Corp., 37 F.3d 1069, 1076 n.16 (5th Cir.
1994)). “[A] fact is ‘material’ if its resolution could affect
the outcome of the action.” Dyer v. Houston, 964 F.3d
374, 379 (5th Cir. 2020) (citation and quotation marks
omitted). “If the moving party fails to meet [its] initial
burden, the motion [for summary judgment] must be
denied, regardless of the nonmovant’s response.”
Pioneer Expl., LLC v. Steadfast Ins. Co., 767 F.3d 503
(5th Cir. 2014) (quotation marks omitted).
When the moving party has met its burden, “the
nonmoving party cannot survive a summary judgment
25a
motion by resting on the mere allegations of its
pleadings.” Duffie v. United States, 600 F.3d 362, 371
(5th Cir. 2010). The nonmovant must identify specific
evidence in the record and articulate how that evidence
supports that party’s claim. Willis v. Cleco Corp., 749
F.3d 314, 317 (5th Cir. 2014). “This burden will not be
satisfied by some metaphysical doubt as to the material
facts, by conclusory allegations, by unsubstantiated
assertions, or by only a scintilla of evidence.” Boudreaux
v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)
(citation and quotation marks omitted). In deciding a
summary judgment motion, the court draws all
reasonable inferences in the light most favorable to the
nonmoving party. Darden v. City of Fort Worth, 880 F.3d
722, 727 (5th Cir. 2018), cert. denied sub. nom. City of
Fort Worth, Tex. v. Darden, 139 S. Ct. 69 (2018).
B.
The WARN Act
The WARN Act prohibits an employer from
closing a plant or ordering a mass layoff unless the
employer provides affected employees with 60-days’
notice of the closing or layoff. 29 U.S.C. § 2102(a);
Hollowell v. Orleans Reg’l Hosp. LLC, 217 F.3d 379, 382
(5th Cir. 2000). The notice period gives those affected
time “to adjust to the prospective loss of employment, to
seek and obtain alternative jobs and . . . to enter skill
training or retraining that will allow [them] to
successfully compete in the job market.” 20 C.F.R. §
639.1(a). Employers who violate the notice provision are
required to provide “back pay for each day of violation.”
29 U.S.C. § 2104(a)(1)(A).
To prove a WARN Act violation, a plaintiff must
show that: (1) the defendant was “an employer”; (2) the
26a
defendant ordered a “plant closing” or “mass layoff”; (3)
the defendant failed to give employees 60-days’ notice
before the closing or layoff; and (4) the plaintiff is an
“aggrieved” or “affected” employee. 29 U.S.C. §§ 2102,
2104. If a plaintiff makes these showings, the employer
may avoid liability by proving as an affirmative defense
that it qualifies for one of the Act’s three exceptions: the
“faltering company” exception; the “unforeseen business
circumstances” exception; or the “natural disaster”
exception. 29 U.S.C. § 2102; 20 C.F.R. § 639.9; In re TWL
Corp., 712 F.3d 886, 897–98 (5th Cir. 2013). The
natural-disaster exception is relevant here:
No notice under [the WARN Act] shall be
required if the plant closing or mass
layoff is due to any form of natural
disaster, such as a flood, earthquake, or
the drought currently ravaging the
farmlands of the United States.
29 U.S.C. § 2102(b)(2)(B). In regulations interpreting
this exception, the Department of Labor addressed the
notice required when an employer closes a plant or
orders a mass layoff due to a natural disaster:
While a disaster may preclude full or any
advance notice, such notice as is
practicable, containing as much of the
information required under § 639.7 as is
available in the circumstances of the
disaster still must be given, whether in
advance or after the fact or an employment
loss caused by a natural disaster.
20 C.F.R. § 639.9(c)(3). The regulations also clarified
that “[f]loods, earthquakes, droughts, storms, tidal
27a
waves or tsunamis and similar effects of nature are
natural disasters under” the WARN Act. 20 C.F.R. §
639.9(c).
The WARN Act’s exceptions, including the
natural-disaster exception at issue, are affirmative
defenses. The employer has the burden to prove that an
exception applied to the layoffs. See 20 C.F.R. § 639.9;
see also Jurcev v. Cent. Comty. Hosp., 7 F.3d 618, 625
(7th Cir. 1993).
C.
The Summary Judgment Record
The parties filed the following summary judgment
evidence:
· an affidavit by Matt Bernard, Chief Administrative
Officer for US Well Services, (Docket Entry No. 21-1);
· a chart listing the daily spot price of oil in 2020 by the
U.S. Energy Information Administration, (id.);
· Oil Market Report – January 2020 by the
International Energy Association, (id.);
· Oil Demand to Rebound in 2020 by Petroleum
Economist, (id.);
· Global Oil Demand to Decline in 2020 as Coronavirus
Weighs Heavily on Markets by the International
Energy Association, (id.);
· termination letters sent to Scott Easom, John Nau,
and Adrian Howard, (id.);
· a declaration by Gabriel Assaad, an attorney for the
plaintiffs, (Docket Entry No. 23-1);
· US Well Services 10-K Report from September 30,
2020, (Docket Entry No. 23-2);
· Oil Crashes by Most Since 1991 as Saudi Arabia
Launches Price War by CNN Business, (Docket Entry
No. 23-3);
28a
· WARN Act notices submitted to the Texas Workforce
Commission, (Docket Entry No. 23-4);
· a press release by US Well Services from March 20,
2020, (Docket Entry No. 23-5);
· Outbreak of Pneumonia of Unknown Etiology (PUE)
in Wuhan, China by the Center for Disease Controls,
(Docket Entry No. 23-6);
· China Virus Could Hit Oil Price by $3 Billion by
Reuters, (Docket Entry No. 23-7);
· Coronavirus Fear Hits Oil, Prices Drop Most Since
May by CNBC (Docket Entry No. 23-8);
· Why the Coronavirus Is a Real Threat to the Oil
Markets by OilPrice.com, (Docket Entry No. 23-9);
· Executive Order GA-14 from the State of Texas,
(Docket Entry No. 23-10);
· Essential Critical Infrastructure Workforce: Ensuring
Community and National Resilience in COVID-19
Response Version 2.0 by the Cybersecurity and
Infrastructure Security Agency, (Docket Entry No. 2311); and
· discovery requests from Easom, (Docket Entry No. 2312).
III.
Analysis
A. The Motions for Summary Judgment
The parties raise three disputes relevant to
determining whether US Well Services qualifies for the
WARN Act’s natural-disaster exception.1 First, they
dispute whether any prior notice of a layoff is required if
1 US Well Services does not contest that it is a covered employer,
that the named plaintiffs were affected employees, or that the
named plaintiffs were terminated as part of a mass layoff. See 29
U.S.C. § 2101(a)(1), (3).
29a
the natural-disaster exception applies.2 (Docket Entry No.
21 at 10; Docket Entry No. 23 at 15). Second, they dispute
whether the COVID-19 pandemic qualifies as a natural
disaster under the Act. (Docket Entry No. 21 at 11–12;
Docket Entry No. 23 at 13). Third, they dispute whether
the COVID-19 pandemic caused US Well Services to lay off
the plaintiffs and other similarly situated employees.
(Docket Entry No. 21 at 13; Docket Entry No. 23 at 13–15).
Each dispute is addressed below.
1. Notice
Section 2102(b)(2)(B) of the WARN Act makes
clear that “[n]o notice” is required if a mass layoff is due
to a natural disaster. 29 U.S.C. § 2102(b)(2)(B). Courts
referring to the natural-disaster exception have noted
that it “dispenses with the [WARN Act’s] notice
requirement altogether in the event of a natural
disaster.” See In re Dewey & LeBoeuf LLP, 507 B.R. 522,
531 n.10 (Bankr. S.D.N.Y. 2014); see also Sides v. Macon
Cty. Greyhound Park, Inc., 725 F.3d 1276, 1285 (11th
Cir. 2013) (reading the natural-disaster exception to
“entirely eliminate the requirement for notice,” unlike
“the unforeseeable business circumstances defense”);
Torres v. Niche, Inc., No. 12-CV-12059, 2013 WL
6655415, at *2 (D. Mass. Dec. 18, 2013) (“The WARN Act
2 The parties made clear at oral argument that their motions do
not address the unforeseen-business-circumstances exception,
which might also apply. Among the issues not addressed in this
memorandum and order are the requirements of the unforeseenbusiness-circumstances exception, the form of notice that is
required under that exception, and whether the notice US Well
Services gave to its employees complied with those requirements.
30a
gives an employer a complete exception in the event of a
natural disaster.”).
This reading is bolstered by the falteringcompany
and
unforeseen-business-circumstances
exceptions, which contain different language on notice.
29 U.S.C. § 2102(b)(2)(A). Congress differentiated
between layoffs resulting from natural disasters, which
require no notice, and layoffs resulting from a company
faltering
or
suffering
unforeseen
business
circumstances, both of which require “as much notice as
is practicable.” 29 U.S.C. § 2102(b)(2), (3). Had Congress
intended to require “as much notice as is practicable” for
layoffs caused by a natural disaster, the “separate
subparagraph listing no-notice-required circumstances
would be superfluous.” Sides, Inc., 725 F.3d at 1285.
Despite the unambiguous statutory language, the
plaintiffs argue that the natural-disaster exception
requires at least some form of notice. They rely on the
Department of Labor’s regulation interpreting the
natural-disaster exception:
While a disaster may preclude full or any
advance notice, such notice as is
practicable, containing as much of the
information required under § 639.7 as is
available in the circumstances of the
disaster still must be given, whether in
advance or after the fact or an
employment loss caused by a natural
disaster.
20 C.F.R. § 639.9(c)(3).
31a
When, as here, a regulation conflicts with the
unambiguous language of a statute, the statute controls.
See Cherokee Nation v. Bernhardt, 936 F.3d 1142, 1156
(10th Cir. 2019) (“[W]hen a statute and a regulation are
in conflict, the statute renders the regulation which is in
conflict with it void and unenforceable.” (citation and
quotation marks omitted)); Texas v. EPA, 726 F.3d 180,
195 (D.C. Cir. 2013) (“[A] valid statute always prevails
over a conflicting regulation, and a regulation can never
trump the plain meaning of a statute.” (citations and
quotation marks omitted)). The court is bound by the
WARN Act, not by the Department of Labor’s
regulations, to the extent they conflict.
The WARN Act unambiguously states that
employers are not required to give affected employees
notice of a plant closing or mass layoff resulting from a
natural disaster. See Lions Health Svcs., Inc. v. Sebelius,
635 F.3d 693, 699–700 (5th Cir. 2011) (“Under [the
Chevron] test, we first ask ‘whether Congress has
directly spoken to the precise question at issue.’ If so, we
‘must give effect to the unambiguously expressed intent
of Congress.’” (quoting Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc., 467 U.S. 837, 842–843 (1984)). The
natural-disaster exception, unlike the falteringcompany
and
unforeseen-business-circumstances
exceptions, dispenses with the WARN Act’s notice
requirement. The regulation requiring some notice
conflicts with the WARN Act’s clear “no notice”
language.
In their reconsideration motion, the plaintiffs
argue that the “no notice” language is ambiguous,
relying on legislative history and the § 2102(b) section
heading, entitled “Reduction of Notification Period.”
32a
(Docket Entry No. 35 at 11). These arguments are
unpersuasive. Section headings and legislative history
are useful to clarify ambiguous text, but they do not
create ambiguities. See Lamie v. U.S. Tr., 540 U.S. 526,
536 (2004) (“We should prefer the plain meaning since
that approach respects the words of Congress. In this
manner we avoid the pitfalls that plague too quick a
turn to the more controversial realm of legislative
history.”); Bhd. of R.R. Trainmen v. Balt. & Ohio R.R.
Co., 331 U.S. 519, 528–29 (1947) (“[T]he wise rule [is]
that the title of a statute and the heading of a section
cannot limit the plain meaning of the text.”). The WARN
Act’s “no notice” language is not ambiguous.
If US Well Services proves the other elements of
the natural-disaster exception, there was no duty to
provide WARN Act notice to employees.
2. A Natural Disaster
Under the WARN Act, an employer is not
required to give employees notice “if the plant closing or
mass layoff is due to any form of natural disaster, such
as a flood, earthquake, or the drought currently
ravaging the farmlands of the United States.” 29 U.S.C.
§ 2102(b)(2)(B). The Department of Labor regulations
clarify that “[f]loods, earthquakes, droughts, storms,
tidal waves or tsunamis and similar effects of nature are
natural disasters under” the WARN Act. 20 C.F.R. §
639.9(c). Disease is not separately named. The parties
dispute whether COVID-19 is a natural disaster under
the WARN Act.
Only two courts so far have addressed the WARN
Act’s natural-disaster exception. One court assumed,
without deciding, that COVID-19 is a natural disaster.
33a
See Benson, et al. v. Enter. Leasing Co. Fla., LLC, No.
6:20-CV-00891, slip op. at 10 (M.D. Fla. Jan. 4, 2021)
(“COVID-19 may be a natural disaster within the
meaning of the WARN Act.”).
The other court found that coal fires in a mine
were not natural disasters. In Carver v. Foresight
Energy LP, No. 3:16-CV-3013, 2016 WL 3812376, at *1
(C.D. Ill. July 12, 2016), a mining company had fired all
of its mining employees after coal fires prevented them
from working in the mine. The court began with the
dictionary definition of “natural”: something “[e]xisting
in or caused by nature; not made or caused by
humankind.” Id. at *4. The court noted that coal fires
are “a form of spontaneous combustion which can occur
when coal is exposed to oxygen and oxidizes, causing the
coal to smolder and release carbon monoxide.” Id. at *2.
The court also noted that coal fires can “be fueled by poor
underground housekeeping, such as failure to properly
clean up spilled oil and grease” and, as the plaintiffs
argued, a poor “ventilation system.” Id. While the coal
fires at issue were the “result of an interaction between
oxygen and coal, both of which exist in nature,” the court
found that the fires were not “natural” because oxygen
and coal in the mines were “combined by human
intervention,” and this “human involvement in the
origins of the combustion events would seem to preclude
the events from being considered a natural disaster.” Id.
at *4.
Outside the WARN Act context, courts have
followed similar reasoning in determining whether
COVID-19 is a natural disaster. In JN Contemporary
Art LLC v. Phillips Auctioneers LLC, the court
addressed whether COVID-19 was a natural disaster
34a
under a force majeure clause in an insurance policy. No.
20-CV-4370, 2020 WL 7405262, at *7 n.7 (S.D.N.Y. Dec.
16, 2020). The court, like the court in Carver, first looked
to the dictionary definition. BLACK’S LAW DICTIONARY
defined “natural” as “[b]rought about by nature as
opposed to artificial means,” and “disaster” as “[a]
calamity; a catastrophic emergency.” Id. (quoting
Natural, Disaster, BLACK’S LAW DICTIONARY (11th ed.
2019)). The OXFORD ENGLISH DICTIONARY defined
“natural disaster” as “[a] natural event that causes great
damage or loss of life such as a flood, earthquake, or
hurricane.” Id.; see also Natural, MERRIAM-WEBSTER’S
COLLEGIATE DICTIONARY 774 (10th ed. 1997) (defining
“natural” as “growing without human care . . . existing
in or produced by nature: not artificial”). The court held
that, “[b]y any measure, the COVID-19 pandemic fits
those definitions,” and that it could not “be seriously
disputed that the COVID-19 pandemic is a natural
disaster.” Id.
Other courts have reached similar conclusions.
See, e.g., AB Stable VIII LLC v. Maps Hotels & Resorts
One LLC, No. 20-CV-0310, 2020 WL 7024929, at *58
(Del. Ch. Nov. 30, 2020) (“The COVID-19 pandemic
arguably fits this definition [of natural disaster]” under
a purchase and sale agreement); Pa. Democratic Party
v. Boockvar, 238 A.3d 345, 370 (Pa. 2020) (“We have no
hesitation in concluding that the ongoing COVID-19
pandemic equates to a natural disaster” under a
Pennsylvania statute); Friends of Danny DeVito v. Wolf,
227 A.3d 872, 889 (Pa. 2020) (“The COVID-19 pandemic
is, by all definitions, a natural disaster” under a
Pennsylvania statute).
35a
COVID-19 qualifies as a disaster under the
WARN Act. COVID-19 is clearly a “disaster.” See
Disaster, BLACK’S LAW DICTIONARY (11th ed. 2019) (“[a]
calamity; a catastrophic emergency”); Natural Disaster,
OXFORD ENGLISH DICTIONARY (“[a] natural event that
causes great damage or loss of life”). In a year, two
million people lost their lives, and over one hundred
million people were diagnosed with infections. See AB
Stable VIII LLC, 2020 WL 7024929, at *58 (“[The
COVID-19 pandemic] is a terrible event that emerged
naturally in December 2019, grew exponentially, and
resulted in serious economic damage and many
deaths.”); Coronavirus World Map: Tracking the Global
Outbreak, N.Y. TIMES (Feb. 10, 2021, 7:37 AM) (tracking
nationwide and global deaths
due to COVID-19),
https://www.nytimes.com/interactive/2020/world/coronavi
rus-maps.html.
COVID-19 also qualifies as a “natural” disaster
because human beings were not responsible for starting
or consciously spreading the virus. Unlike coal fires,
which did not occur in Carver without humans digging
mines and introducing coal to oxygen, COVID-19, like
other viruses, did not require conscious human effort to
appear or spread, as individuals without symptoms
infected others. See Angela L. Rasmussen, On the
Origins of SARS-CoV-2, 27 NATURE MEDICINE 9, 9
(2021) (“[A]ll indications suggest that, like SARS-CoV
and MERS-CoV, this virus probably evolved in a bat
host until an unknown spillover event into humans
occurred.”); Murat Seyran, et al., Questions Concerning
the Proximal Origin of SARS CoV-2, JOURNAL OF
MEDICAL VIROLOGY 1, 1 (2020) (“There is a consensus
that severe acute respiratory syndrome coronavirus
36a
(SARS-CoV-2)
originated
naturally
from
bat
coronaviruses (CoVs), in particular RaTG13.”); see also
AB Stable VIII LLC, 2020 WL 7024929, at *58 n.214
(“The record in this case does not support a finding that
the virus was anything other than a natural product of
germ evolution.”). While humans can take precautions
to slow the spread of COVID-19 or engage in behavior
that fosters contagion, the possibility of slowing the
virus spread does not suggest that humans caused the
pandemic. 3
3 In their reconsideration motion, the plaintiffs argue that the
court held that humans have “no effect” on the spread of COVID19. (Docket Entry No. 35 at 22). They misread the court’s opinion.
In distinguishing COVID-19 from the coal fires in Carver, the
court noted that human beings are “not responsible for starting
or consciously spreading the virus.” Because human beings did
not start COVID-19, it qualifies as “natural” under Carver’s
reasoning. The plaintiffs seem to agree that humans are not
responsible for creating or starting the spread of the COVID-19
virus, making it “natural.” (Docket Entry No. 35 at 22). The
plaintiffs’ argument would mean that, for example, because
human actors cause climate changes, which in turn make
hurricanes and storms more frequent and severe, those storms
are not “natural.”
The plaintiffs now argue that humans must be incapable of
stopping a disaster for it to be “natural.” Their argument is
unconvincing. First, a natural disaster may be slowed or altered
by human intervention and still be a natural disaster. Examples
include measures to reduce avalanches or to control or stop
wildfires. Second, human beings must interact with a natural
disaster for it to affect them. For example, a drought does not
affect a farmer unless he or she farms in a place with drought; a
flood may not affect an employer if its business is outside the
flooded area; and an earthquake typically cannot harm an
employer if all upstream and downstream contributors to its
business are far from the epicenter. The plaintiffs’ argument, if
37a
Courts have consistently noted, in different
contexts, that a disease outbreak is a natural disaster.
See Meyer v. Conlon, 162 F.3d 1264, 1266 (10th Cir.
1998) (“The Federal Crop Insurance Act (‘FCIA’)
established the Federal Crop Insurance Corporation
(‘FCIC’) to encourage farmers to purchase multiple peril
crop insurance, which protects farmers against loss from
natural disasters, such as hail and disease.”); Badgley v.
Varelas, 729 F.2d 894, 902 (2d Cir. 1984) (“natural
disaster such as fire or disease”). Other courts have
suggested that virus epidemics could be natural
disasters. See Nat. Res. Def. Council v. EPA, 896 F.3d
459, 464 (D.C. Cir. 2018) (“And an ordinary reading of
‘natural event’ summons images of natural disasters
such as tornados and volcanic eruptions; cosmic
episodes, such as comets and harvest moons; and
organic processes, such as viral epidemics and seasonal
changes.”).
The plaintiffs argue that the WARN Act uses a
specific definition of “natural disaster” that is limited to
events that are both catastrophic and sudden,
surprising, or swift, like earthquakes and floods, that
quickly destroy an employer’s place or means of doing
business. 4 (Docket Entry No. 23 at 12). The court does
adopted, would effectively eliminate the natural-disaster
exception by requiring no human involvement with the disaster.
4 This argument also targets the causal link between COVID-19
and the US Well Services layoffs. For example, a natural disaster,
such as an earthquake or tornado, that destroys an employer’s
only factory has both an immediate and direct causal link to the
layoff of all factory employees. By contrast, rampant mold after a
flood, or a natural disaster that destroys an employer’s only
customer and reduces that customer’s demand for the employer’s
products, is both slower in time and more indirect in effect than
38a
not find this limit in the statute. The WARN Act’s
natural-disaster exception is triggered by “any form of
natural disaster.” 29 U.S.C. § 2102(b)(2)(B) (emphasis
added). Congress was broad, if unspecific, and did not
impose a “suddenness” requirement. The WARN Act
provides three examples of natural disasters, “flood,
earthquake, or the drought currently ravaging the
farmlands of the United States.” 5 Id. The phrase “such
as,” which precedes these examples, signals that these
three are illustrative, not exhaustive. 6 See Bragdon v.
a natural disaster that destroys the employer’s factory. The
WARN Act’s causation requirement is discussed below
5 Congress passed the WARN Act during the drought of 1988, one
of the worst since the Dust Bowl of the 1930s. The drought, which
began in April 1988 and continued into 1989, placed roughly 40%
of the lower 48 states in extreme drought. Crop yields were cut
by at least a third. See generally U.S. Dep’t of Commerce, The
Drought
of
1988
and
Beyond
(Oct.
18,
1988),
https://repository.library.noaa.gov/view/noaa/10952/noaa_10952
_DS1.pdf. Estimates of the drought’s cost exceed $40 billion. See
Homeland
Security
Digital
Library,
The
1988
Drought/Heatwave,
https://www.hsdl.org/c/tl/1988-u-sdroughtheatwave/.
6 The Department of Labor recently issued a Frequently Asked
Questions guidance on the WARN Act and COVID-19. U.S. Dep’t
of Lab., WARN Act COVID-19 Frequently Asked Questions,
https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/WARN%2
0FAQ%20for%20COVID19.pdf. The FAQs suggest that
employers may be able to claim the unforeseen-businesscircumstances exception, but the FAQs do not mention the
natural-disaster exception. Id. at 3. One court found the lack of
reference to the natural-disaster exception to be “a deafening
silence.” Benson, No. 6:20-CV-00891, slip op. at 11.
The court does not find the Department of Labor’s FAQs helpful.
The FAQS did not consider whether COVID-19 fits the definition
of natural disaster. The FAQs also make clear that they are “not
39a
Abbott, 524 U.S. 624, 639 (1998) (“As the use of the term
‘such as’ confirms, the list is illustrative, not
exhaustive.”). And the inclusion of drought, which is
usually prolonged but neither sudden nor surprising,
undermines reading in a limit to suddenly occurring
natural disasters. 7 See AB Stable VIII LLC, 2020 WL
7024929, at *58 (“A natural disaster need not be
sudden—drought conditions develop and persist over
years, and the ultimate natural disaster of climate
change has developed over decades.”).
The plaintiffs also argue that the court should
apply the statutory canons of ejusdem generis and
noscitur a sociis, limiting “natural disaster” to events
similar to floods, earthquakes, or droughts. (Docket
Entry No. 35 at 19–21). Under ejusdem generis, “where
general words follow specific words in a statutory
enumeration, the general words are [usually] construed
to embrace only objects similar in nature to those objects
enumerated by the preceding specific words.” Wash.
State Dept. Soc. & Health Servs. v. Guardianship Estate
of Keffeler, 537 U.S. 371, 384 (2003). Under noscitur a
sociis, “a word is given more precise content by the
neighboring words with which it is associated.” United
States v. Williams, 553 U.S. 285, 294 (2008). Both
binding on courts” and disputes “regarding the interpretation of
the Act” are “determined on a case-by-case basis” by the courts.
The Department of Labor’s regulations interpreting the
unforeseen-business-circumstances
exception
state
that
suddenness might make a business circumstance unforeseeable:
“An important indicator of a business circumstance that is not
reasonably foreseeable is that the circumstance is caused by some
sudden, dramatic, and unexpected action or condition outside the
employer’s control.” 20 C.F.R. § 639.9(b)(1).
7
40a
canons are typically used to limit a general term that
follows more specific terms. They are not helpful here. 8
First, these canons help courts avoid “giving
unintended breadth to Acts of Congress.” Yates v. United
States, 574 U.S. 528, 543 (2015) (citation and quotation
marks omitted). The phrase “any form of natural
disaster,” however, signals intentional breadth. As the
Supreme Court has noted on at least two occasions,
statutory canons that restrict normal meaning typically
do not apply when a generic term is preceded by “any.”
It is unclear that ejusdem generis applies when, as here, a
general term precedes an illustrative list of examples. Courts
typically apply ejusdem generis when a general term “follow[s]
specific ones.” Gooch v. United States, 297 U.S. 124, 128 (1936);
Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 195 (2012) (“The ejusdem generis
canon applies when a drafter has tacked on a catchall phrase at
the end of an enumeration of specifics.”); United States v.
Koutsostamatis, 956 F.3d 301, 308 (5th Cir. 2020) (“That is, when
a list of specific X’s is followed by the catchall phrase ‘other X’s,’
ejusdem generis ‘implies the addition of similar after the word
other.’”).
8
Some scholars have argued that ejusdem generis does not apply
when a general term precedes specific terms, because this
formulation introduces the general term without limitation, and
the general term is more naturally read “at its broadest face
value.” Scalia & Garner, supra, at 204–205; but see Gregory R.
Englert, The Other Side of Ejusdem Generis, 11 Scribes J. Leg.
Writing 51 (2007) (disagreeing with Scalia and Garner and
surveying disagreement in the courts). Some courts have
suggested that illustrative examples following a general term are
meant to expand the scope of the general term, not limit it. See
Brown v. Azar, No. 1:20-CV-03702, 2020 WL 6364310, at *9 (N.D.
Ga. Oct. 29, 2020) (“[T]he specific terms are preceded by the word
‘including,’ which signifies a more expansive, non-exhaustive
list.”).
41a
See Ali v. Fed. Bureau Prisons, 552 U.S. 214, 218–19
(2008) (the canons of ejusdem generis and noscitur a
sociis did not apply to the phrase “any other law
enforcement officer” because “[r]ead naturally, the word
‘any’ has an expansive meaning” (citation omitted));
Harrison v. PPG Indus., Inc., 446 U.S. 578, 588–89
(1980) (ejusdem generis did not apply to the phrase “any
other final action” because this “expansive language
offer[ed] no indication whatever that Congress intended
[a] limiting construction”). When, as here, specific
examples follow a general term, the examples signal
intentional breadth and serve as “an illustrative
application of the general principle.” Fed. Land Bank v.
Bismarck Lumber Co., 314 U.S. 95, 100 (1941); see also
Scalia & Garner, supra note 9, at 204 (“Following the
general term with specifics can serve the function of
making doubly sure that the broad . . . general term is
taken to include the specifics. Some formulations
suggest or even specifically provide this belt-andsuspenders function by introducing the specifics with a
term such as including.”).
Second, these canons would apply here only if the
court finds that floods, earthquakes, and droughts have
a “common attribute.” See Ali, 552 U.S. at 225. The only
common attribute appears to be that they are natural
disasters. An earthquake is a geological disaster; a
drought is meteorological; and a flood is partially
hydrological and partially meteorological. The WARN
Act regulations include “storms, tidal waves,” and
“tsunamis.” 20 C.F.R. § 639.9(c). While not listed, the
WARN Act would also seem to include space-related
natural disasters (meteorites), as well as natural
disasters that do not fall into any of the listed groups,
42a
such as wildfires or avalanches. 9 Some of these natural
disasters cause property damage, some cause loss of life,
and some cause both. The court does not see an obvious
reason for excluding biological natural disasters, such as
infectious disease outbreaks, epidemics, or pandemics.
See AB Stable VIII LLC, 2020 WL 7024929, at *58.
When Congress passed the WARN Act, it was
particularly concerned with a drought that had
decimated crop yields across the country. A plague of
locusts that decimates crops, or a pandemic in cattle that
greatly reduces beef or dairy “crops,” would cause
similar damage. The human-centered effect of COVID19 is not a reason for finding that viral or bacterial
pandemics are not natural disasters under the WARN
Act.
In sum, the WARN Act does not exclude a virus
outbreak from the natural-disaster exception. The
dictionary definition of natural disaster, other court
decisions, and the statutory language support the
conclusion that the COVID-19 pandemic is a natural
disaster under the WARN Act.
3. Causation
The WARN Act eliminates the need for notice if a
plant closing or mass layoff is “due to” a natural disaster.
29 U.S.C. § 2102(b)(2)(B). The parties dispute whether
9 The plaintiffs also argue that a viral pandemic does not qualify
as a natural disaster because it is not specifically mentioned in
the WARN Act. (Docket Entry No. 35 at 22–23). Neither is a
typhoon. But, as the plaintiffs agree, a typhoon would qualify as
a natural disaster. (Id. at 21 n.6). So would other natural
disasters that are not specifically enumerated.
43a
the WARN Act requires but-for causation or proximate
causation. 10 They also dispute whether the US Well
Services layoffs were “due to” COVID-19 or to a
combination of factors besides a natural disaster.
a.
The “Due To” Causation Requirement
“Due to” means “because of.” U.S. Postal Serv. v.
Postal Regul. Comm’n, 640 F.3d 1263, 1267 (D.C. Cir.
2011) (quoting WEBSTER’S THIRD NEW INT’L DICTIONARY
699 (1993)); see also New York v. U.S. Dep’t of Labor, 477
F. Supp. 3d 1, 7 (S.D.N.Y. 2020) (equating the terms
“because” and “due to”); Progressive Cas. Ins. Co. v.
FDIC, 80 F. Supp. 3d 923, 955–56 (N.D. Iowa 2015)
(“due to” means “owing to,” “in consequence of, on
account of, because of”). The Supreme Court has held
that “because of” “incorporates the ‘simple’ and
‘traditional’ standard of but-for causation.” Bostock, 140
S. Ct. at 1739 (quoting Univ. of Tex. Sw. Med. Ctr. v.
Nassar, 570 U.S. 338, 350 (2013)); see also Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 63–64, n.14 (2007)
(“because of” means “based on” and “‘based on’ indicates
a but-for causal relationship”). Courts assume that butfor causation “is one of the traditional background
principles against which Congress legislate[s],” and that
a phrase such as “due to” or “because of” “imposes a
requirement of but-for causation.” Burrage v. United
But-for causation “is established whenever a particular
outcome would not have happened ‘but for’ the purported cause.”
Bostock v. Clayton Cty., Ga., 140 S. Ct. 1731, 1739 (2020).
Proximate causation generally “refers to the basic requirement
that . . . there must be some direct relation between the [outcome]
and the [purported cause].” Paroline v. United States, 572 U.S.
434, 444 (2014) (citation and quotation marks omitted).
10
44a
States, 571 U.S. 204, 214 (2014) (citations and quotation
marks omitted). The WARN Act’s phrase “due to” means
but-for causation. 11
The plaintiffs argue that but-for causation is the
wrong standard and that the WARN Act requires a
natural disaster to be the direct, meaning proximate,
cause of a mass layoff, relying on the Department of
Labor regulations. These regulations interpret the
natural-disaster exception to require an employer to
“demonstrate that its plant closing or mass layoff is a
direct result of a natural disaster.” 20 C.F.R. § 639.9(c)(2)
(emphasis added). The Department of Labor explained
that the “direct result” regulatory requirement stemmed
from the “floor debates demonstrat[ing] Congressional
intent that an employment action that was a direct
result would fall under this exception, while one that
was caused as an indirect result of a natural disaster
would not be covered.” Worker Adjustment and
Retraining Notification; Interim Interpretive Rule, 53 F.
Reg. 48884, 48889 (Dec. 2, 1988).
The legislative history is not so clear. The original
proposed language in the WARN Act allowed an
employer to claim the natural-disaster exception if a
plant closing or mass layoff was “due, directly or
indirectly, to any form of natural disaster.” 134 Cong.
Rec. S8686–89, 358 (daily ed. June 28, 1988) (emphasis
added). Some members of Congress expressed concern
over the word “indirectly” because it is “amorphous” and
11 The plaintiffs argue that US Well Services did not argue for
but-for causation, but it clearly argued for but-for causation at
oral argument. The court substitutes this memorandum opinion
and order to fully consider the parties’ arguments.
45a
hard to “tie it down.” Id. at 360; see also id. at 360 (“I
think you could make a lot of ludicrous cases out as to
what impact the drought or flood or earthquake has.”).
Others expressed concern that the term “directly” would
not protect those “downstream” from producers
immediately affected by a natural disaster. Id. (“[W]hat
we are concerned about is somebody who may be
downstream, somebody who may not be in the direct line
[of] selling services or products to the farmer but in any
event has the same economic difficulties because of the
drought.”); id. at 363 (“Now [causation] is going to be a
matter of proof . . . It may not be just those who serve
the farmer. It might be somebody downstream. It might
be a barge operator. It might be someone else . . .
bakeries, for example, elevators—go up and down the
line—meatpacking plants, ethanol plants, all of these
are going to be impacted if this drought persists.”).
Congress ended up removing both “directly” and
“indirectly” from the statute. 12 Id. at 362–63; 29 U.S.C.
§ 2102(b)(2)(B).
“Congress’ rejection of” the term “directly”
“weighs heavily against” an interpretation that would
impose that term. 13 Hamdan v. Rumsfeld, 548 U.S. 557,
12 Other courts have looked to the WARN Act’s legislative history
to interpret its requirements. See, e.g., Hotel Emps. & Rest.
Emps. Int’l Union Local 54 v. Elsinore Shore Assocs., 173 F.3d
175, 181 (3d Cir. 1999) (analyzing the WARN Act’s legislative
history to determine if a government-ordered closing qualifies as
a “plant closing”).
13 The court in Benson relied on the Department of Labor’s
regulations to impose a direct result requirement, but the court
did not consider the WARN Act’s legislative history or whether
46a
579–80 (2006). The fact that Congress rejected the word
“directly” not only cuts against the Department of
Labor’s regulations, it cuts against proximate causation
as the standard. The Supreme Court and Fifth Circuit
have equated direct causation to proximate causation.
See Paroline, 572 U.S. at 444 (proximate causation
requires a “direct relation between the [outcome] and
the [purported cause]”); Hemi Grp., LLC v. City of New
York, N.Y., 559 U.S. 1, 13–14 (2010) (equating
“proximate” and “direct” causation); Molina-Aranda v.
Black Magic Enters., LLC, 983 F.3d 779, 784 (5th Cir.
2020) (equating proximate causation and direct
causation under RICO); Dixie Pine Prod. Co. v. Md. Cas.
Co., 133 F.2d 583, 585 (5th Cir. 1943) (“It is well settled
that the words ‘direct cause’ ordinarily are synonymous
in legal intendment with ‘proximate cause.’”). Because
Congress rejected direct causation, it seemingly rejected
proximate causation as well. 14 See Lexmark Int’l, Inc. v.
Static Control Components, Inc., 572 U.S. 118, 132
the regulations are a reasonable interpretation of the WARN Act.
No. 6:20-CV-00891, slip op. at 10.
14 Some courts have held that the phrase “due to” is ambiguous,
giving agencies discretion to interpret that phrase. See All. of
Nonprofit Mailers v. Postal Regul. Comm’n, 790 F.3d 186, 193
(D.C. Cir. 2015) (“[T]he scope of the Accountability Act’s ‘due to’
causation standard is ambiguous.”). In light of Bostock, 140 S. Ct.
at 1739, which did not find the phrase “because of” ambiguous,
these cases are questionable. Even if the phrase “due to” is
ambiguous, the Department of Labor’s use of the term “direct
result” is still an unreasonable interpretation of that phrase since
Congress explicitly rejected the term “directly.” See United States
v. Home Concrete & Supply, LLC, 566 U.S. 478, 494 (2012)
(Scalia, J., concurring in part) (“It does not matter whether the
word ‘yellow’ is ambiguous when the agency has interpreted it to
mean ‘purple.’”).
47a
(2014) (“Congress, we assume, is familiar with the
common-law rule and does not mean to displace it sub
silentio.”).
By contrast, but-for causation asks whether an
effect would have occurred in the absence of particular
factor or event, not whether that factor or event directly
or exclusively caused the effect. See United States v.
Salinas, 918 F.3d 463, 466 (5th Cir. 2019) (“A proximatecause inquiry would ask how directly each cause affected
the final outcome, but the but-for causation standard
asks simply whether the outcome would have occurred
in the absence of the action.” (emphasis in original));
United States v. Ramos-Delgado, 763 F.3d 398, 402 (5th
Cir. 2014) (“As long as the defendants’ actions were a
but-for cause of the ultimate harm, it does not matter
whether the initial action directly resulted in the harm
but only that the harm would not have occurred but-for
the initial action.”).
This result is consistent with cases in which the
Supreme Court has held that a statute does not
eliminate proximate cause without a clear indication
that Congress intended to do so. See, e.g., Pharms., Inc.
v. Broudo, 544 U.S. 336, 342–346 (2005); Holmes v. Secs.
Inv. Prot. Corp., 503 U.S. 258, 268–70 (1992); Associated
Gen. Contractors Cal., Inc. v. Carpenters, 459 U.S. 519,
529–35 (1983). First, Congress signaled its intention to
eliminate proximate causation by the using the words
“due to” rather than “directly due to.” Second, in those
cases, the Supreme Court addressed statutes that raised
concerns about a plaintiff recovering from a range of
parties, including those who did not proximately cause
the plaintiff’s harm. See Pharms., Inc., 544 U.S. at 342–
346 (securities fraud); Holmes, 503 U.S. at 268–70
48a
(Racketeer Influenced and Corrupt Organizations Act);
Associated Gen. Contractors Cal., Inc., 459 U.S. at 529–
35 (Clayton Act); see also Lexmark Int’l, 572 U.S. at 132
(“[I]n all cases of loss, we are to attribute it to the
proximate cause, and not to any remote cause.”). That
concern is not present here. Because the naturaldisaster exception is an affirmative defense, proximate
cause serves no liability-limiting function.
The Supreme Court has also held that the phrase
“because of” showed Congress’s intention to incorporate
but-for causation and cautioned courts against reading
more stringent causation requirements into statutes
that impose only but-for causation. See Bostock, 140 S.
Ct. at 1739 (“Congress could have taken a more
parsimonious approach. As it has in other statutes, it
could have added ‘solely’ to indicate that actions taken
‘because of’ the confluence of multiple factors do not
violate the law.”); Burrage, 571 U.S. at 216 (“Congress
could have . . . adopted a modified causation test tailored
to cases involving concurrent causes, . . . [but] chose
instead to use language that imports but-for causality.”).
The
unforeseen-business-circumstances
exception further suggests that Congress did not intend
to use proximate causation in the natural-disaster
exception. The unforeseen-business-circumstances
exception requires an employer to show that a “mass
layoff is caused by business circumstances that were not
reasonably foreseeable.” 29 U.S.C. § 2102(b)(2)(A)
(emphasis added). Numerous courts, including the
Supreme Court, have interpreted “caused by” to impose
a proximate-causation requirement. See Jerome B.
Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513
U.S. 527, 536 (1995) (“The Act uses the phrase ‘caused
49a
by,’ which more than one Court of Appeals has read as
requiring what tort law has traditionally called
‘proximate causation.’”); Kilburn v. Socialist People’s
Libyan Arab Jamahiriya, 376 F.3d 1123, 1128 (D.C. Cir.
2004) (interpreting “caused by” to require proximate
causation). While not explicitly mentioning proximate
causation, courts interpreting “caused by” in WARN Act
cases have generally required defendants to show that
an unforeseen business circumstance was the
immediate cause of a mass layoff. 15 See Gross, 554 F.3d
at 877–78 (“[The defendant’s] decision to shut down
came in the immediate wake of [its partner’s]
withdrawal . . . [even though] it had been suffering from
financial troubles for months.”); see also In re Jevic
Holding Corp., 496 B.R. 151, 164–65 (Bankr. D. Del.
2013) (“[T]he ‘immediate precipitant of the decision to
terminate employees’ was [the lender’s] refusal to
extend forbearance,” even though there were “other
reasons” for the lender’s refusal and the employer’s
financial difficulties).
The use of the phrase “caused by” in the
unforeseen-business-circumstances exception, but not
in the natural-disaster exception, suggests that
Congress intended to impose but-for, not proximate,
Courts applying the unforeseen-business-circumstances
causation requirement to layoffs occurring after multiple causes
have typically held that the unforeseen business circumstances
do not need to be the sole cause of a plant closing or mass layoff,
but they must be the “straw that broke the camel’s back.” Gross
v. Hale-Halsell Co., 554 F.3d 870, 877–78 (10th Cir. 2009); see
also Jones v. Kayser-Roth Hosiery, Inc., 748 F. Supp. 1276, 1285
(E.D. Tenn. 1990) (an employer’s loss of its largest customer was
the “last straw” that made it economically infeasible to continue
operating the plant).
15
50a
causation in the natural-disaster exception. See Keene
Corp. v. United States, 508 U.S. 200, 208 (1993)
(“‘[W]here Congress includes particular language in one
section of a statute but omits it in another . . . , it is
generally presumed that Congress acts intentionally
and purposely in the disparate inclusion or exclusion.’”
(quoting Russello v. United States, 464 U.S. 16, 23
(1983)). At least one other court has followed similar
reasoning in noting the different causation
requirements between the unforeseen-businesscircumstances exception in § 2102 and the strike
exemption in § 2103. See Teamsters Nat. Freight Indus.
Negot. Comm. ex rel. Howe v. Churchill Truck Lines,
Inc., 935 F. Supp. 1021, 1026 (W.D. Mo. 1996) (“In
contrast to the ‘business circumstance’ exception, the
‘strike exemption’ appears to place a less onerous
burden upon the employer who need only prove that the
closing ‘related’ to the strike, to be exempted from the
sixty-day notice requirement. Foreseeability and direct
causation are not at issue.”).
In sum, the WARN Act’s language, structure, and
legislative history, as well as case law interpreting
similar statutory language, support finding that the
natural-disaster exception uses but-for causation
standards. The COVID-19 pandemic need not be the
direct or sole cause of the layoffs for the natural-disaster
exception to apply. 16
16 In their reconsideration motion, the plaintiffs argue that the
court’s opinion effectively reads “indirectly” back into the statute.
Congress removed the words “directly” and “indirectly” from the
statute. But-for causation, unlike proximate causation, matches
this change because “but-for” causation does not specifically
51a
b.
Economic Downturn in the Oil Industry
The parties agree that an economic downturn in
the oil business caused US Well Services to order a mass
layoff on March 18, 2020, but they sharply dispute
whether the but-for cause of that economic downturn
was the COVID-19 pandemic. The current record
presents genuine factual disputes material to answering
that question.
But-for causation “is established whenever a
particular outcome would not have happened ‘but for’
the purported cause.” Bostock, 140 S. Ct. at 1739. The
“but-for test directs us to change one thing at a time and
see if the outcome changes”; “[i]f it does, we have found
a but-for cause.” Id. For example, “if a car accident
occurred both because the defendant ran a red light and
because the plaintiff failed to signal his turn at the
intersection, we might call each a but-for cause of the
collision.” Id. (emphasis in original); see also Burrage,
571 U.S. at 211 (“Thus, if poison is administered to a
man debilitated by multiple diseases, it is a but-for
cause of his death even if those diseases played a part in
his demise, so long as, without the incremental effect of
the poison, he would have lived.”).
The record does not clearly show that the COVID19 pandemic was or was not the but-for cause of the
economic downturn in the oil industry as of March 18,
address “directness.” The plaintiffs’ argument also glosses over
the other grounds for finding that the natural-disaster exception
imposes but-for causation. The WARN Act’s text, legislative
history, and structure all support but-for causation as the correct
choice.
52a
2020. Oil prices were dropping before the COVID-19
pandemic from a price war between Saudi Arabia and
Russia. (Docket Entry No. 21-1 at 7). One source states
that oil prices dropped below $30.00 per barrel, in early
March 2020, immediately after the price war, because
Saudi Arabia was expected to “flood the market with
crude in a bid to recapture market share.” (Docket Entry
No. 21-3 at 1). In January 2020, oil prices dropped
slightly, but they remained above $50.00 per barrel until
the end of February. (Docket Entry No. 21-1 at 7; Docket
Entry No. 23-8 at 2). In a January 2020 report, the
International Energy Agency did not predict a drop in
oil demand. (Docket Entry No. 21-1 at 53). At the same
time, some experts suggested a worst-case scenario of oil
prices dropping roughly $5 per barrel because of
COVID-19. (Docket Entry No. 23-8 at 4; Docket Entry
No. 23-9 at 3). On March 9, 2020, the International
Energy Agency suggested that, using optimistic
assumptions, short-term oil demand might grow by
“480,000 barrels a day.” (Docket Entry No. 21-1 at 92).
The Agency’s worst-case-scenario prediction was a drop
in demand of “730,000 barrels a day in 2020,” which was
a small fraction of the “99.9 million barrels a day”
demand expected in 2020. (Id.). The Agency also
suggested that the worst effects would stem from a drop
in demand from China. (Id.).
The record does not clearly show the relative roles
of the price war and the COVID-19 pandemic in the
March 18, 2020, layoffs. In the termination letters US
Well Services provided the named plaintiffs, it stated
that the cause of the layoff was both “unforeseeable
business circumstances resulting from a lack of
available customer work caused by the significant drop
53a
in oil prices and the unexpected adverse impact that the
Coronavirus has caused.” (Docket Entry No. 21-1 at 98).
But statements from the US Well Services CEO
following the mass layoff do not mention COVID-19.
(Docket Entry No. 22-5). US Well Services also
terminated employees before the vast majority of other
businesses that filed WARN notices with the State of
Texas. (Docket Entry No. 23-4 at 27). The US Well
Services Form 10-K for 2020 states that the company
contemplated “reductions-in-force” and furloughs in
February 2020, even though oil prices then hovered
around $50.00 per barrel and no COVID-19 national
emergency had been declared. (Docket Entry No. 23-2 at
28). The US Well Services Chief Administrative Officer
stated in his affidavit that prices above $50.00 per barrel
were “commercially viable” in January and February of
2020. (Docket Entry No. 21-1 at 3).
In short, the record evidence is disputed. Some
evidence supports the inference that the price decrease
from the price war between Russia and Saudi Arabia,
before March 18, 2020, may have had the largest effect
on oil prices and could be the but-for cause of the US
Well Services March 18 mass layoff. Other evidence
supports an inference that it was COVID-19 that
depressed oil prices and demand for fracking-services as
of March 18, 2020. The size of the COVID-19 effect and
the timing of that effect in relation to the US Well
Services mass layoff are questions that cannot be
answered definitively on the current record. 17
17 In their reconsideration motion, the plaintiffs argue that the
court’s causation ruling could “wrap in” foreign natural disasters.
The ruling does not imply that any effect of a natural disaster, no
matter how small, would allow an employer to claim the natural-
54a
Both motions for summary judgment are denied.
B.
The Motion for Interlocutory Appeal
The plaintiffs moved to certify three questions for
interlocutory appeal. A party is generally “entitled to a
single appeal, to be deferred until final judgment has
been entered.” Digital Equipment Corp. v. Desktop
Direct, Inc., 511 U.S. 863, 868 (1994); see also Henry v.
Lake Charles Am. Press, LLC, 566 F.3d 164, 171 (5th
Cir. 2009) (noting that “as a general rule, parties must
litigate all issues in the trial court before appealing any
one issue”). Under 28 U.S.C. § 1292(b), a district court
judge may certify an order for interlocutory appeal if
three conditions are met: the order (1) “involves a
controlling question of law”; (2) “there is substantial
ground for difference of opinion” on the question; and (3)
“an immediate appeal from the order may materially
advance the ultimate termination of the litigation.” A
district court judge certifying an order for interlocutory
appeal must articulate, in writing, why the order
satisfies each of these criteria. See Linton v. Shell Oil
Co., 563 F.3d 556, 557–58 (5th Cir. 2009). “District
courts have unfettered discretion to deny certification,
even when all [statutory criteria] are satisfied.” Nieman
v. City of Dallas, No. 3:14-CV-3897, 2016 WL 470235, *3
(N.D. Tex. Feb. 8, 2016).
disaster exception. The employer would still be required to prove
that the natural disaster was the cause-in-fact of a plant closing
or mass layoff. The effect of a foreign natural disaster is less
likely to be the cause-in-fact of a domestic plant closing or mass
layoff, as compared to a local disaster.
55a
The court grants the plaintiffs’ motion for
interlocutory appeal. The court certifies two controlling
questions of law for interlocutory appeal:
1.
Does COVID-19 qualify as a natural disaster
under the WARN Act’s natural-disaster
exception, 29 U.S.C. § 2102(b)(2)(B)?
2.
Does the WARN Act’s natural-disaster
exception, 29 U.S.C. § 2102(b)(2)(B), incorporate
but-for or proximate causation?
These questions of law are “pure question[s] of
law” and will not require the court of appeals to “study
the record.” Ahrenholz v. Bd. of Trustees Univ. of Ill., 219
F.3d 674, 675 (7th Cir. 2000). Whether COVID-19
qualifies as a natural disaster, and the causation
standard under the natural disaster exception, are
statutory-interpretation issues that turn on the WARN
Act’s language, not the record.
These questions involve a substantial ground for
difference of opinion over which “fair-minded jurists
might reach contradictory conclusions.” See Reese v. BP
Expl. (Alaska) Inc., 643 F.3d 681, 688 (9th Cir. 2011).
Both questions are “novel and difficult questions of first
impression.” Ryan v. Flowserve Corp., 444 F. Supp. 2d
718, 724 (N.D. Tex. 2006). The WARN Act’s definition of
natural disaster involves complicated statutory
interpretation with little guidance from case law,
legislative history, or agency regulations. The plaintiffs’
motion
for
reconsideration,
while
ultimately
unconvincing to the court, presents substantial reasons
for a difference of opinion. The court’s decision on the
natural-disaster exception’s causation standard
disagrees with the Department of Labor regulations and
56a
the opinion of another district court. That district court
certified the same question on causation for
interlocutory appeal. See Benson, et al. v. Enter. Leasing
Co. Fla., LLC, No. 6:20-CV-00891, slip op. at 14 (M.D.
Fla. Feb. 4, 2021).
Appealing these questions could materially
advance the ultimate termination of the litigation.
Answering a question materially advances the
termination of the litigation “if reversal of the district
court’s opinion would result in dismissal of the action.”
Ryan, 444 F. Supp. 2d at 723 (quoting Strougo v.
Scudder, Stevens & Clark, Inc., No. 96-CV-2136, 1997
WL 473566, at *7 (S.D.N.Y. Aug. 18, 1997)). If reversed
on either question, the reversal will materially affect
whether US Well Services qualifies for the naturaldisaster exception. If COVID-19 does not qualify as a
natural disaster, US Well Services will not be able to
rely on the exception. Similarly, if US Well Services
must prove that COVID-19 was the direct cause of its
layoffs, it is unlikely that it will be able to claim the
exception.
While the court certifies these questions for
interlocutory appeal, the court will not stay the
litigation. See 28 U.S.C. § 1292(b) (“That application for
an appeal hereunder shall not stay proceedings in the
district court unless the district judge or the Court of
Appeals or a judge thereof shall so order.”). The naturaldisaster exception is only one of two affirmative defenses
at issue. The case also involves the plaintiffs’ affirmative
case for liability and class certification under Federal
Rule of Civil Procedure 23. Discovery has just begun and
should continue while the court of appeals considers
these questions.
57a
IV. Conclusion
US Well Services’ motion for summary judgment,
(Docket Entry No. 21), and the plaintiffs’ motion for
summary judgment, (Docket Entry No. 23), are denied.
The plaintiffs’ motion for reconsideration, (Docket Entry
No. 35), is denied. The plaintiffs’ alternative motion to
certify questions for interlocutory appeal, (Docket Entry
No. 35), is granted.
SIGNED on March 19, 2021, at Houston, Texas.
Lee H. Rosenthal
Chief United States District Judge
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APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
No. H-20-2995
[Filed February 10, 2021]
SCOTT EASOM; et al Plaintiff,
versus
US WELL SERVICES, INC., Defendant
MEMORANDUM AND ORDER
It’s been a bad year for the oil business. In early
March 2020, a price war between Saudi Arabia and
Russia drove oil prices down, decreasing the demand for
oil-field fracking services. US Well Services, Inc. felt
these effects and began cutting costs and laying off
employees. Less than two weeks later, the COVID-19
pandemic was declared a national emergency. Air travel
steeply declined. Manufacturing plants reduced
production. Many people worked from home or lost their
jobs, emptying downtown business districts. Oil prices
declined, reflecting the drop in demand for petroleum
59a
products to fly planes, run factories, and power cars for
people commuting to and from work each day. Fracking
became even more economically unfeasible. On March
18, 2020, US Well Services laid off many of its
employees.
Before these layoffs, US Well Services employees
Scott Easom, John Nau, and Adrian Howard were
working on oil-drilling sites in Texas. When they
finished their work and returned from the field on
March 18, 2020, they received verbal and written notice
that their employment was terminated. They sued US
Well Services, alleging that it violated the Worker
Adjustment and Retraining Notification (WARN) Act by
failing to give them 60-days’ notice before terminating
them as part of the mass layoff. Less than three months
later, US Well Services moved for summary judgment,
arguing that it was not required to give employees prior
notice of the layoffs because the WARN Act provides an
exception for mass layoffs caused by a natural disaster.
US Well Services argues that the COVID-19 pandemic
excuses it from the 60-day notice requirement.
Few cases have interpreted the WARN Act’s
natural-disaster exception. There is little authority on
the definition of natural disaster; whether the natural
disaster must be the but-for or proximate cause of the
layoff; whether some kind of notice is required under
this exception; and, if so, what kind of notice suffices.
This legal uncertainty is compounded by the factual
uncertainty on this thin record over what events,
together or separately, caused the company’s mass
layoffs during the first quarter of 2020. The price war
between Russia and Saudi Arabia and the COVID-19
pandemic both impacted the demand for oil, spot oil
60a
prices, and the demand for fracking. But the causal links
between COVID-19, the decline in oil prices, and the US
Well Services layoffs are unclear. Because a fuller record
is needed to answer these questions reliably and
accurately, the court denies both parties’ motions for
summary judgment. The reasons for this ruling are
explained below.
I.
Background
US Well Services is a hydraulic fracturing
company. (Docket Entry No. 21-1 at 1). Oil producers
hire US Well Services to frack well sites that have
already been drilled. (Id. at 2). The crews fracking at
well sites typically include equipment operators,
electronics technicians, a crew supervisor, an engineer,
and mechanics to maintain the fracking machinery.
(Id.). Once a fracking job is complete, the crews spend
two to three days taking down the equipment to use at
another site. (Id.).
When spot prices for oil drop below a level at
which fracking is commercially viable, oil producers
typically discontinue significant aspects of their work
and do not demand fracking services from companies
like US Well Services. (Id.). In January and February
2020, oil prices were between $45.00 and $60.00 per
barrel. (Docket Entry No. 21 at 7). Fracking was viable
at those prices. (Id. at 3). Some sources predicted oil
prices would continue to increase in 2020. (Id. at 87–89).
US Well Services increased its workforce in January and
February 2020. (Id. at 3).
On March 9, 2020, the price of oil dropped to
$31.05 per barrel. (Id. at 4). Eleven days later, the price
61a
dropped below $20.00 per barrel. (Id. at 7). On March 18,
2020, the plaintiffs returned from the field and were told
not to come back. (Id. at 96–98). In April 2020, oil prices
dropped below $0 per barrel before recovering to roughly
$30.00 four weeks later. (Id. at 7).
The parties dispute the primary cause of the
decline in oil prices and the link to the layoffs. US Well
Services points to sources from the International Energy
Agency stating that the COVID-19 pandemic was
responsible for the “sharp downgrade” in the demand for
oil in early March 2020 and after. (Docket Entry No. 211 at 92). US Well Services points to other oil services
companies that filed for bankruptcy because of “a severe
cut in demand and cash crunch due to the coronavirus
pandemic.” (Id. at 95).
Easom submitted evidence showing that the drop
in oil prices began on March 9, 2020, shortly before the
President declared the COVID-19 pandemic a national
emergency. Easom argues that the decline was initially
caused by “a price war,” beginning on March 8, 2020,
between Saudi Arabia and Russia. (Docket Entry No.
23-3). Easom also points to public statements from the
president and CEO of US Well Services on March 20,
2020, that mentioned layoffs as a cost-saving measure
but did not refer to the COVID-19 pandemic as playing
a role. (Docket Entry No. 23-5). Easom submitted other
reports, dated before March 2020, predicting that the
COVID-19 pandemic would cause only a small drop in
oil prices. (Docket Entry No. 23-7).
In early March 2020, some US Well Services
customers began discontinuing fracking orders at their
well sites. (Id. at 4). US Well Services crew members
62a
who were working at these well sites stopped fracking,
shut down their field operations, and packed up the
fracking equipment. (Id. at 5). US Well Services could
not find other customers for fracking services. (Id. at 4–
5). During this period, US Well Services terminated
several high-ranking management officials and
administrative staff and reduced pay across the board
for its employees. (Id. at 5).
The plaintiffs—Scott Easom, John Nau, and
Adrian Howard—were working on different facilities in
Texas. On March 18, 2020, US Well Services informed
them, verbally and in writing, that they were laid off.
(Id. at 5, 96–98). US Well Services told the plaintiffs that
the layoffs were “due to unforeseeable business
circumstances resulting from a lack of available
customer work caused by the significant drop in oil
prices and the unexpected adverse impact that the
Coronavirus has caused.” (Id. at 96, 97, 98).
In August 2020, Easom, Nau, and Howard,
representing themselves and seeking to represent a
class of similarly situated employees, sued US Well
Services for alleged violations of the WARN Act. (Docket
Entry No. 1, 10). In November 2020, US Well Services
moved for summary judgment, arguing that it qualified
for the WARN Act’s natural-disaster exception because
the COVID-19 pandemic caused the layoffs. (Docket
Entry No. 21). Easom opposed the motion for summary
judgment and filed what closer inspection revealed to be
a cross-motion, arguing that US Well Services did not
qualify for the natural-disaster exception. (Docket Entry
No. 23).
63a
II.
The Legal Standards and the Summary
Judgment Record
A.
Motion for Summary Judgment
“Summary judgment is appropriate only if there
is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Vann
v. City of Southaven, Miss., 884 F.3d 307, 309 (5th Cir.
2018) (per curiam) (quotation marks omitted); Fed. R.
Civ. P. 56(a). “A genuine dispute of material fact exists
if a reasonable jury could enter a verdict for the nonmoving party.” Doe v. Edgewood Indep. Sch. Dist., 964
F.3d 351, 358 (5th Cir. 2020). The moving party “bears
the initial responsibility of . . . demonstrat[ing] the
absence of a genuine issue of material fact,” Jones v.
United States, 936 F.3d 318, 321 (5th Cir. 2019) (citation
omitted), and “identifying those portions of [the record]
which it believes demonstrate the absence of a genuine
issue of material fact,” Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986).
“Where the nonmovant bears the burden of proof
at trial, the movant may merely point to an absence of
evidence, thus shifting to the non-movant the burden of
demonstrating by competent summary judgment proof
that there is an issue of material fact warranting trial.”
Lyons v. Katy Indep. Sch. Dist., 964 F.3d 298, 301–02
(5th Cir. 2020) (citation and quotation marks omitted).
While the party moving for summary judgment must
demonstrate the absence of a genuine and material
factual dispute, it does not need to negate the elements
of the nonmovant’s case. Austin v. Kroger Tex., LP, 864
F.3d 326, 335 (5th Cir. 2017) (per curiam) (quoting Little
64a
v. Liquid Air Corp., 37 F.3d 1069, 1076 n.16 (5th Cir.
1994)). “[A] fact is ‘material’ if its resolution could affect
the outcome of the action.” Dyer v. Houston, 964 F.3d
374, 379 (5th Cir. 2020) (citation and quotation marks
omitted). “If the moving party fails to meet [its] initial
burden, the motion [for summary judgment] must be
denied, regardless of the nonmovant’s response.”
Pioneer Expl., LLC v. Steadfast Ins. Co., 767 F.3d 503
(5th Cir. 2014) (quotation marks omitted).
When the moving party has met its burden, “the
nonmoving party cannot survive a summary judgment
motion by resting on the mere allegations of its
pleadings.” Duffie v. United States, 600 F.3d 362, 371
(5th Cir. 2010). The nonmovant must identify specific
evidence in the record and articulate how that evidence
supports that party’s claim. Willis v. Cleco Corp., 749
F.3d 314, 317 (5th Cir. 2014). “This burden will not be
satisfied by some metaphysical doubt as to the material
facts, by conclusory allegations, by unsubstantiated
assertions, or by only a scintilla of evidence.” Boudreaux
v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005)
(citation and quotation marks omitted). In deciding a
summary judgment motion, the court draws all
reasonable inferences in the light most favorable to the
nonmoving party. Darden v. City of Fort Worth, 880 F.3d
722, 727 (5th Cir. 2018), cert. denied sub. nom. City of
Fort Worth, Tex. v. Darden, 139 S. Ct. 69 (2018).
B.
The WARN Act
The WARN Act prohibits an employer from
closing a plant or ordering a mass layoff unless the
employer provides affected employees with 60-days’
notice of the closing or layoff. 29 U.S.C. § 2102(a);
65a
Hollowell v. Orleans Reg’l Hosp. LLC, 217 F.3d 379, 382
(5th Cir. 2000). The notice period gives those affected
time “to adjust to the prospective loss of employment, to
seek and obtain alternative jobs and . . . to enter skill
training or retraining that will allow [them] to
successfully compete in the job market.” 20 C.F.R. §
639.1(a). Employers who violate the notice provision are
required to provide “back pay for each day of violation.”
29 U.S.C. § 2104(a)(1)(A).
To prove a WARN Act violation, a plaintiff must
show that: (1) the defendant was “an employer”; (2) the
defendant ordered a “plant closing” or “mass layoff”; (3)
the defendant failed to give employees 60-days’ notice
before the closing or layoff; and (4) the plaintiff is an
“aggrieved” or “affected” employee. 29 U.S.C. §§ 2102,
2104. If a plaintiff makes these showings, the employer
may avoid liability by proving as an affirmative defense
that it qualifies for one of the Act’s three exceptions: the
“faltering company” exception; the “unforeseen business
circumstances” exception; or the “natural disaster”
exception. 29 U.S.C. § 2102; 20 C.F.R. § 639.9; In re TWL
Corp., 712 F.3d 886, 897–98 (5th Cir. 2013). The
natural-disaster exception is relevant here:
No notice under [the WARN Act] shall
be required if the plant closing or mass
layoff is due to any form of natural
disaster, such as a flood, earthquake, or
the drought currently ravaging the
farmlands of the United States.
29 U.S.C. § 2102(b)(2)(B). In regulations interpreting
this exception, the Department of Labor addressed the
66a
notice required when an employer closes a plant or
orders a mass layoff due to a natural disaster:
While a disaster may preclude full or
any advance notice, such notice as is
practicable, containing as much of the
information required under § 639.7 as
is available in the circumstances of the
disaster still must be given, whether in
advance or after the fact or an
employment loss caused by a natural
disaster.
20 C.F.R. § 639.9(c)(3). The regulations also clarified
that “[f]loods, earthquakes, droughts, storms, tidal
waves or tsunamis and similar effects of nature are
natural disasters under” the WARN Act. 20 C.F.R. §
639.9(c).
The WARN Act’s exceptions, including the
natural-disaster exception at issue, are affirmative
defenses. The employer has the burden to prove that an
exception applied to the layoffs. See 20 C.F.R. § 639.9;
see also Jurcev v. Cent. Comty. Hosp., 7 F.3d 618, 625
(7th Cir. 1993).
C.
The Summary Judgment Record
The parties filed the following summary judgment
evidence:
· an affidavit by Matt Bernard, Chief Administrative
Officer for US Well Services, (Docket Entry No. 21-1);
· a chart listing the daily spot price of oil in 2020 by the
U.S. Energy Information Administration, (id.);
· Oil Market Report – January 2020 by the
International Energy Association, (id.);
67a
· Oil Demand to Rebound in 2020 by Petroleum
Economist, (id.);
· Global Oil Demand to Decline in 2020 as Coronavirus
Weighs Heavily on Markets by the International
Energy Association, (id.);
· termination letters sent to Scott Easom, John Nau,
and Adrian Howard, (id.);
· a declaration by Gabriel Assaad, an attorney for the
plaintiffs, (Docket Entry No. 23-1);
· US Well Services 10-K Report from September 30,
2020, (Docket Entry No. 23-2);
· Oil Crashes by Most Since 1991 as Saudi Arabia
Launches Price War by CNN Business, (Docket Entry
No. 23-3);
· WARN Act notices submitted to the Texas Workforce
Commission, (Docket Entry No. 23-4);
· a press release by US Well Services from March 20,
2020, (Docket Entry No. 23-5);
· Outbreak of Pneumonia of Unknown Etiology (PUE)
in Wuhan, China by the Center for Disease Controls,
(Docket Entry No. 23-6);
· China Virus Could Hit Oil Price by $3 Billion by
Reuters, (Docket Entry No. 23-7);
· Coronavirus Fear Hits Oil, Prices Drop Most Since
May by CNBC (Docket Entry No. 23-8);
· Why the Coronavirus Is a Real Threat to the Oil
Markets by OilPrice.com, (Docket Entry No. 23-9);
· Executive Order GA-14 from the State of Texas,
(Docket Entry No. 23-10);
· Essential Critical Infrastructure Workforce: Ensuring
Community and National Resilience in COVID-19
Response Version 2.0 by the Cybersecurity and
Infrastructure Security Agency, (Docket Entry No. 2311); and
68a
· discovery requests from Easom, (Docket Entry No. 2312).
III.
Analysis
The parties raise three disputes relevant to
determining whether US Well Services qualifies for the
WARN Act’s natural-disaster exception.1 First, they
dispute whether any prior notice of a layoff is required if
the natural-disaster exception applies.2 (Docket Entry No.
21 at 10; Docket Entry No. 23 at 15). Second, they dispute
whether the COVID-19 pandemic qualifies as a natural
disaster under the Act. (Docket Entry No. 21 at 11–12;
Docket Entry No. 23 at 13). Third, they dispute whether
the COVID-19 pandemic caused US Well Services to lay off
the plaintiffs and other similarly situated employees.
(Docket Entry No. 21 at 13; Docket Entry No. 23 at 13–15).
Each dispute is addressed below.
A.
Notice
Section 2102(b)(2)(B) of the WARN Act makes
clear that “[n]o notice” is required if a mass layoff is due
to a natural disaster. 29 U.S.C. § 2102(b)(2)(B). Courts
1 US Well Services does not contest that it is a covered employer,
that the named plaintiffs were affected employees, or that the
named plaintiffs were terminated as part of a mass layoff. See 29
U.S.C. § 2101(a)(1), (3).
2 The parties made clear at oral argument that their motions do
not address the unforeseen-business-circumstances exception,
which might also apply. Among the issues not addressed in this
memorandum and order are the requirements of the unforeseenbusiness-circumstances exception, the form of notice that is
required under that exception, and whether the notice US Well
Services gave to its employees complied with those requirements.
69a
referring to the natural-disaster exception have noted
that it “dispenses with the [WARN Act’s] notice
requirement altogether in the event of a natural
disaster.” See In re Dewey & LeBoeuf LLP, 507 B.R. 522,
531 n.10 (Bankr. S.D.N.Y. 2014); see also Sides v. Macon
Cty. Greyhound Park, Inc., 725 F.3d 1276, 1285 (11th
Cir. 2013) (reading the natural-disaster exception to
“entirely eliminate the requirement for notice,” unlike
“the unforeseeable business circumstances defense”);
Torres v. Niche, Inc., No. 12-CV-12059, 2013 WL
6655415, at *2 (D. Mass. Dec. 18, 2013) (“The WARN Act
gives an employer a complete exception in the event of a
natural disaster.”).
This reading is bolstered by the falteringcompany
and
unforeseen-business-circumstances
exceptions, which contain different language on notice.
29 U.S.C. § 2102(b)(2)(A). Congress differentiated
between layoffs resulting from natural disasters, which
require no notice, and layoffs resulting from a company
faltering
or
suffering
unforeseen
business
circumstances, both of which require “as much notice as
is practicable.” 29 U.S.C. § 2102(b)(2), (3). Had Congress
intended to require “as much notice as is practicable” for
layoffs caused by a natural disaster, the “separate
subparagraph listing no-notice-required circumstances
would be superfluous.” Sides, Inc., 725 F.3d at 1285.
Despite the unambiguous statutory language,
Easom argues that the natural-disaster exception
requires at least some form of notice. He relies on the
Department of Labor’s regulation interpreting the
natural-disaster exception:
70a
While a disaster may preclude full or any
advance notice, such notice as is
practicable, containing as much of the
information required under § 639.7 as is
available in the circumstances of the
disaster still must be given, whether in
advance or after the fact or an
employment loss caused by a natural
disaster.
20 C.F.R. § 639.9(c)(3).
When, as here, a regulation conflicts with the
unambiguous language of a statute, the statute controls.
See Cherokee Nation v. Bernhardt, 936 F.3d 1142, 1156
(10th Cir. 2019) (“[W]hen a statute and a regulation are
in conflict, the statute renders the regulation which is in
conflict with it void and unenforceable.” (citation and
quotation marks omitted)); Texas v. EPA, 726 F.3d 180,
195 (D.C. Cir. 2013) (“[A] valid statute always prevails
over a conflicting regulation, and a regulation can never
trump the plain meaning of a statute.” (citations and
quotation marks omitted)). The court is bound by the
WARN Act, not by the Department of Labor’s
regulations, to the extent they conflict.
The WARN Act unambiguously states that
employers are not required to give affected employees
notice of a plant closing or mass layoff resulting from a
natural disaster. See Lions Health Svcs., Inc. v. Sebelius,
635 F.3d 693, 699–700 (5th Cir. 2011) (“Under [the
Chevron] test, we first ask ‘whether Congress has
directly spoken to the precise question at issue.’ If so, we
‘must give effect to the unambiguously expressed intent
of Congress.’” (quoting Chevron, U.S.A., Inc. v. Nat. Res.
71a
Def. Council, Inc., 467 U.S. 837, 842–843 (1984)). The
natural-disaster exception, unlike the falteringcompany
and
unforeseen-business-circumstances
exceptions, dispenses with the WARN Act’s notice
requirement. The regulation requiring some notice
conflicts with the WARN Act’s clear “no notice”
language.
If US Well Services proves the other elements of
the natural-disaster exception, then under the WARN
Act, it had no duty to provide notice to its employees.
B.
A Natural Disaster
Under the WARN Act, an employer is not
required to give employees notice “if the plant closing or
mass layoff is due to any form of natural disaster, such
as a flood, earthquake, or the drought currently
ravaging the farmlands of the United States.” 29 U.S.C.
§ 2102(b)(2)(B). The Department of Labor regulations
clarify that “[f]loods, earthquakes, droughts, storms,
tidal waves or tsunamis and similar effects of nature are
natural disasters under” the WARN Act. 20 C.F.R. §
639.9(c). Disease is not separately named. The parties
dispute whether COVID-19 is a natural disaster under
the WARN Act.
Only two courts so far have addressed the WARN
Act’s natural-disaster exception. One court assumed,
without deciding, that COVID-19 is a natural disaster.
See Benson, et al. v. Enterprise Leasing Co. Fla., LLC,
No. 6:20-CV-00891, at 10 (M.D. Fla. Jan. 4, 2021)
(“COVID-19 may be a natural disaster within the
meaning of the WARN Act.”).
72a
The other court found that coal fires in a mine
were not natural disasters. In Carver v. Foresight
Energy LP, No. 3:16-CV-3013, 2016 WL 3812376, at *1
(C.D. Ill. July 12, 2016), a mining company had fired all
of its mining employees after coal fires prevented them
from working in the mine. The court began with the
dictionary definition of “natural”: something “[e]xisting
in or caused by nature; not made or caused by
humankind.” Id. at *4. The court noted that coal fires
are “a form of spontaneous combustion which can occur
when coal is exposed to oxygen and oxidizes, causing the
coal to smolder and release carbon monoxide.” Id. at *2.
The court also noted that coal fires can “be fueled by poor
underground housekeeping, such as failure to properly
clean up spilled oil and grease” and, as the plaintiffs
argued, a poor “ventilation system.” Id. While the coal
fires at issue were the “result of an interaction between
oxygen and coal, both of which exist in nature,” the court
found that the fires were not “natural” because oxygen
and coal in the mines were “combined by human
intervention,” and this “human involvement in the
origins of the combustion events would seem to preclude
the events from being considered a natural disaster.” Id.
at *4.
Outside the WARN Act context, courts have
followed similar reasoning in determining whether
COVID-19 is a natural disaster. In JN Contemporary
Art LLC v. Phillips Auctioneers LLC, the court
addressed whether COVID-19 was a natural disaster
under a force majeure clause in an insurance policy. No.
20-CV-4370, 2020 WL 7405262, at *7 n.7 (S.D.N.Y. Dec.
16, 2020). The court, like the court in Carver, first looked
to the dictionary definition. BLACK’S LAW DICTIONARY
73a
defined “natural” as “[b]rought about by nature as
opposed to artificial means,” and “disaster” as “[a]
calamity; a catastrophic emergency.” Id. (quoting
Natural, Disaster, BLACK’S LAW DICTIONARY (11th ed.
2019)). The OXFORD ENGLISH DICTIONARY defined
“natural disaster” as “[a] natural event that causes great
damage or loss of life such as a flood, earthquake, or
hurricane.” Id.; see also Natural, MERRIAM-WEBSTER’S
COLLEGIATE DICTIONARY 774 (10th ed. 1997) (defining
“natural” as “growing without human care . . . existing
in or produced by nature: not artificial”). The court held
that, “[b]y any measure, the COVID-19 pandemic fits
those definitions,” and that it could not “be seriously
disputed that the COVID-19 pandemic is a natural
disaster.” Id.
Other courts have reached similar conclusions.
See, e.g., AB Stable VIII LLC v. Maps Hotels & Resorts
One LLC, No. 20-CV-0310, 2020 WL 7024929, at *58
(Del. Ch. Nov. 30, 2020) (“The COVID-19 pandemic
arguably fits this definition [of natural disaster]” under
a purchase and sale agreement); Pa. Democratic Party
v. Boockvar, 238 A.3d 345, 370 (Pa. 2020) (“We have no
hesitation in concluding that the ongoing COVID-19
pandemic equates to a natural disaster” under a
Pennsylvania statute); Friends of Danny DeVito v. Wolf,
227 A.3d 872, 889 (Pa. 2020) (“The COVID-19 pandemic
is, by all definitions, a natural disaster” under a
Pennsylvania statute).
COVID-19 qualifies as a disaster under the
WARN Act. COVID-19 is clearly a “disaster.” See
Disaster, BLACK’S LAW DICTIONARY (11th ed. 2019) (“[a]
calamity; a catastrophic emergency”); Natural Disaster,
OXFORD ENGLISH DICTIONARY (“[a] natural event that
74a
causes great damage or loss of life”). In a year, two
million people lost their lives, and over one hundred
million people were diagnosed with infections. See AB
Stable VIII LLC, 2020 WL 7024929, at *58 (“[The
COVID-19 pandemic] is a terrible event that emerged
naturally in December 2019, grew exponentially, and
resulted in serious economic damage and many
deaths.”); Coronavirus World Map: Tracking the Global
Outbreak, N.Y. TIMES (Feb. 10, 2021, 7:37 AM) (tracking
nationwide and global deaths
due
to
COVID19),https://www.nytimes.com/interactive/2020/world/coron
avirus-maps.html.
COVID-19 also qualifies as a “natural” disaster
because human beings were not responsible for starting
or consciously spreading the virus. Unlike coal fires,
which did not occur in Carver without humans digging
mines and introducing coal to oxygen, COVID-19, like
other viruses, did not require conscious human effort to
appear or spread, as individuals without symptoms
infected others. See Angela L. Rasmussen, On the
Origins of SARS-CoV-2, 27 NATURE MEDICINE 9, 9
(2021) (“[A]ll indications suggest that, like SARS-CoV
and MERS-CoV, this virus probably evolved in a bat
host until an unknown spillover event into humans
occurred.”); Murat Seyran, et al., Questions Concerning
the Proximal Origin of SARS CoV-2, JOURNAL OF
MEDICAL VIROLOGY 1, 1 (2020) (“There is a consensus
that severe acute respiratory syndrome coronavirus
(SARS-CoV-2)
originated
naturally
from
bat
coronaviruses (CoVs), in particular RaTG13.”); see also
AB Stable VIII LLC, 2020 WL 7024929, at *58 n.214
(“The record in this case does not support a finding that
the virus was anything other than a natural product of
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germ evolution.”). While humans can take precautions
to slow the spread of COVID-19 or engage in behavior
that fosters contagion, the possibility of slowing the
virus spread does not suggest that humans caused the
pandemic.
Courts have consistently held, in different
contexts, that a disease outbreak is a natural disaster.
See Meyer v. Conlon, 162 F.3d 1264, 1266 (10th Cir.
1998) (“The Federal Crop Insurance Act (‘FCIA’)
established the Federal Crop Insurance Corporation
(‘FCIC’) to encourage farmers to purchase multiple peril
crop insurance, which protects farmers against loss from
natural disasters, such as hail and disease.”); Badgley v.
Varelas, 729 F.2d 894, 902 (2d Cir. 1984) (“natural
disaster such as fire or disease”). Other courts have
suggested that virus epidemics could be natural
disasters. See Nat. Res. Def. Council v. EPA, 896 F.3d
459, 464 (D.C. Cir. 2018) (“And an ordinary reading of
‘natural event’ summons images of natural disasters
such as tornados and volcanic eruptions; cosmic
episodes, such as comets and harvest moons; and
organic processes, such as viral epidemics and seasonal
changes.”).
Easom argues that the WARN Act uses a specific
definition of “natural disaster” that is limited to events
that are both catastrophic and sudden or swift, like
earthquakes and floods, that quickly destroy an
employer’s place or means of doing business. 3 (Docket
3 This argument also targets the causal link between COVID-19
and the US Well Services layoffs. For example, a natural disaster,
such as an earthquake or tornado, that destroys an employer’s
only factory has both an immediate and direct causal link to the
layoff of all factory employees. By contrast, rampant mold after a
76a
Entry No. 23 at 12). The court does not find this limit in
the statute. The WARN Act’s natural-disaster exception
is triggered by “any form of natural disaster.” 29 U.S.C.
§ 2102(b)(2)(B) (emphasis added). Congress was broad,
if unspecific, and did not impose a “suddenness”
requirement. The WARN Act provides three examples of
natural disasters, “flood, earthquake, or the drought
currently ravaging the farmlands of the United States.” 4
Id. The phrase “such as,” which precedes these
examples, signals that these three are illustrative, not
exhaustive. 5 See Bragdon v. Abbott, 524 U.S. 624, 639
flood, or a natural disaster that destroys an employer’s only
customer and reduces demand for its products, is both slower in
time and more indirect in effect than a natural disaster that
destroys an employer’s factory. The WARN Act’s causation
requirement is discussed below.
4 Congress passed the WARN Act during the drought of 1988, one
of the worst since the Dust Bowl of the 1930s. The drought, which
began in April 1988 and continued into 1989, placed roughly 40%
of the lower 48 states in extreme drought. Crop yields were cut
by at least a third. See generally U.S. Dep’t of Commerce, The
Drought
of
1988
and
Beyond
(Oct.
18,
1988),
https://repository.library.noaa.gov/view/noaa/10952/noaa_10952
_DS1.pdf. Estimates of the drought’s cost exceed $40 billion. See
Homeland
Security
Digital
Library,
The
1988
Drought/Heatwave,
https://www.hsdl.org/c/tl/1988-u-sdroughtheatwave/.
5 The Department of Labor recently issued a Frequently Asked
Questions guidance on the WARN Act and COVID-19. U.S. Dep’t
of Lab., WARN Act COVID-19 Frequently Asked Questions,
https://www.dol.gov/sites/dolgov/files/ETA/Layoff/pdfs/WARN%2
0FAQ%20for%20COVID19.pdf. The FAQs suggest that
employers may be able to claim the unforeseen-businesscircumstances exception, but the FAQs do not mention the
natural-disaster exception. Id. at 3. One court found the lack of
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(1998) (“As the use of the term ‘such as’ confirms, the list
is illustrative, not exhaustive.”). And the inclusion of
drought, which is usually prolonged but not sudden,
undermines reading in a limit to suddenly occurring
natural disasters. 6 See AB Stable VIII LLC, 2020 WL
7024929, at *58 (“A natural disaster need not be
sudden—drought conditions develop and persist over
years, and the ultimate natural disaster of climate
change has developed over decades.”).
In sum, the WARN Act does not exclude a virus
outbreak from the natural-disaster exception. The
dictionary definition of natural disaster, other court
decisions, and the statutory language support the
conclusion that the COVID-19 pandemic is a natural
disaster under the WARN Act.
C.
Causation
The WARN Act eliminates the need for notice if a
plant closing or mass layoff is “due to” a natural disaster.
reference to the natural-disaster exception to be “a deafening
silence.” Benson, No. 6:20-cv-00891, at 11.
The court does not find the Department of Labor’s FAQs helpful.
The FAQS did not consider whether COVID-19 fits the definition
of natural disaster. The FAQs also make clear that they are “not
binding on courts” and disputes “regarding the interpretation of
the Act” are “determined on a case-by-case basis” by the courts.
The Department of Labor’s regulations interpreting the
unforeseen-business-circumstances
exception
state
that
suddenness might make a business circumstance unforeseeable:
“An important indicator of a business circumstance that is not
reasonably foreseeable is that the circumstance is caused by some
sudden, dramatic, and unexpected action or condition outside the
employer’s control.” 20 C.F.R. § 639.9(b)(1).
6
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29 U.S.C. § 2102(b)(2)(B). The parties dispute whether
the WARN Act requires but-for causation or proximate
causation. 7 They also dispute whether the US Well
Services layoffs were “due to” COVID-19 or to a
combination of factors besides a natural disaster.
1.
The “Due To” Causation Requirement
“Due to” means “because of.” U.S. Postal Serv. v.
Postal Regul. Comm’n, 640 F.3d 1263, 1267 (D.C. Cir.
2011) (quoting WEBSTER’S THIRD NEW INT’L DICTIONARY
699 (1993)); see also New York v. U.S. Dep’t of Labor, 477
F. Supp. 3d 1, 7 (S.D.N.Y. 2020) (equating the terms
“because” and “due to”); Progressive Cas. Ins. Co. v.
FDIC, 80 F. Supp. 3d 923, 955–56 (N.D. Iowa 2015)
(“due to” means “owing to,” “in consequence of, on
account of, because of”). The Supreme Court has held
that “because of” “incorporates the ‘simple’ and
‘traditional’ standard of but-for causation.” Bostock, 140
S. Ct. at 1739 (quoting Univ. of Tex. Sw. Med. Ctr. v.
Nassar, 570 U.S. 338, 350 (2013)); see also Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 63–64, n.14 (2007)
(“because of” means “based on” and “‘based on’ indicates
a but-for causal relationship”). Courts assume that butfor causation “is one of the traditional background
principles against which Congress legislate[s],” and that
a phrase such as “due to” or “because of” “imposes a
7 But-for causation “is established whenever a particular outcome
would not have happened ‘but for’ the purported cause.” Bostock
v. Clayton Cty., Ga., 140 S. Ct. 1731, 1739 (2020). Proximate
causation generally “refers to the basic requirement that . . .
there must be some direct relation between the [outcome] and the
[purported cause].” Paroline v. United States, 572 U.S. 434, 444
(2014) (citation and quotation marks omitted).
79a
requirement of but-for causation.” Burrage v. United
States, 571 U.S. 204, 214 (2014) (citations and quotation
marks omitted). The WARN Act’s phrase “due to” means
but-for causation.
Easom argues that but-for causation is the wrong
standard and that the WARN Act requires a natural
disaster to be the direct, meaning proximate, cause of a
mass layoff, relying on the Department of Labor
regulations. These regulations interpret the naturaldisaster exception to require an employer to
“demonstrate that its plant closing or mass layoff is a
direct result of a natural disaster.” 20 C.F.R. § 639.9(c)(2)
(emphasis added). The Department of Labor explained
that the “direct result” regulatory requirement stemmed
from the “floor debates demonstrat[ing] Congressional
intent that an employment action that was a direct
result would fall under this exception, while one that
was caused as an indirect result of a natural disaster
would not be covered.” Worker Adjustment and
Retraining Notification; Interim Interpretive Rule, 53 F.
Reg. 48884, 48889 (Dec. 2, 1988).
The court reads the legislative history differently.
The original proposed language in the WARN Act
allowed an employer to claim the natural-disaster
exception if a plant closing or mass layoff was “due,
directly or indirectly, to any form of natural disaster.”
134 Cong. Rec. S8686– 89, 358 (daily ed. June 28, 1988)
(emphasis added). Some members of Congress
expressed concern over the word “indirectly” because it
is “amorphous” and hard to “tie it down.” Id. at 360; see
also id. at 360 (“I think you could make a lot of ludicrous
cases out as to what impact the drought or flood or
earthquake has.”). Others expressed concern that the
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term “directly” would not protect those “downstream”
from producers immediately affected by a natural
disaster. Id. (“[W]hat we are concerned about is
somebody who may be downstream, somebody who may
not be in the direct line [of] selling services or products
to the farmer but in any event has the same economic
difficulties because of the drought.”); id. at 363 (“Now
[causation] is going to be a matter of proof . . . It may not
be just those who serve the farmer. It might be
somebody downstream. It might be a barge operator. It
might be someone else . . . bakeries, for example,
elevators—go up and down the line—meatpacking
plants, ethanol plants, all of these are going to be
impacted if this drought persists.”). Congress ended up
removing both “directly” and “indirectly” from the
statute. 8 Id. at 362–63; 29 U.S.C. § 2102(b)(2)(B).
“Congress’ rejection of” the term “directly”
“weighs heavily against” an interpretation that would
impose that term. 9 Hamdan v. Rumsfeld, 548 U.S. 557,
579–80 (2006). The fact that Congress rejected the word
“directly” not only cuts against the Department of
Labor’s regulations, it cuts against proximate causation
8 Other courts have looked to the WARN Act’s legislative history
to interpret its requirements. See, e.g., Hotel Emps. & Rest.
Emps. Int’l Union Local 54 v. Elsinore Shore Assocs., 173 F.3d
175, 181 (3d Cir. 1999) (analyzing the WARN Act’s legislative
history to determine if a government-ordered closing qualifies as
a “plant closing”).
The court in Benson relied on the Department of Labor’s
regulations to impose a direct result requirement, but the court
did not consider the WARN Act’s legislative history or whether
the regulations are a reasonable interpretation of the WARN Act.
No. 6:20-cv-00891, at 10.
9
81a
as the standard. The Supreme Court and Fifth Circuit
have equated direct causation to proximate causation.
See Paroline, 572 U.S. at 444 (proximate causation
requires a “direct relation between the [outcome] and
the [purported cause]”); Hemi Grp., LLC v. City of New
York, N.Y., 559 U.S. 1, 13–14 (2010) (equating
“proximate” and “direct” causation); Molina-Aranda v.
Black Magic Enters., LLC, 983 F.3d 779, 784 (5th Cir.
2020) (equating proximate causation and direct
causation under RICO); Dixie Pine Prod. Co. v. Md. Cas.
Co., 133 F.2d 583, 585 (5th Cir. 1943) (“It is well settled
that the words ‘direct cause’ ordinarily are synonymous
in legal intendment with ‘proximate cause.’”). Because
Congress rejected direct causation, it seemingly rejected
proximate causation as well. 10 See Lexmark Int’l, Inc. v.
Static Control Components, Inc., 572 U.S. 118, 132
(2014) (“Congress, we assume, is familiar with the
common-law rule and does not mean to displace it sub
silentio.”).
10 Some courts have held that the phrase “due to” is ambiguous,
giving agencies discretion to interpret that phrase. See All. of
Nonprofit Mailers v. Postal Regul. Comm’n, 790 F.3d 186, 193
(D.C. Cir. 2015) (“[T]he scope of the Accountability Act’s ‘due to’
causation standard is ambiguous.”). In light of Bostock, 140 S. Ct.
at 1739, which did not find the phrase “because of” ambiguous,
these cases are questionable. Even if the phrase “due to” is
ambiguous, the Department of Labor’s use of the term “direct
result” is still an unreasonable interpretation of that phrase since
Congress explicitly rejected the term “directly.” See United States
v. Home Concrete & Supply, LLC, 566 U.S. 478, 494 (2012)
(Scalia, J., concurring in part) (“It does not matter whether the
word ‘yellow’ is ambiguous when the agency has interpreted it to
mean ‘purple.’”).
82a
By contrast, but-for causation asks whether an
effect would have occurred in the absence of particular
factor or event, not whether that factor or event directly
or exclusively caused the effect. See United States v.
Salinas, 918 F.3d 463, 466 (5th Cir. 2019) (“A proximatecause inquiry would ask how directly each cause affected
the final outcome, but the but-for causation standard
asks simply whether the outcome would have occurred
in the absence of the action.” (emphasis in original));
United States v. Ramos-Delgado, 763 F.3d 398, 402 (5th
Cir. 2014) (“As long as the defendants’ actions were a
but-for cause of the ultimate harm, it does not matter
whether the initial action directly resulted in the harm
but only that the harm would not have occurred but-for
the initial action.”).
This result is consistent with cases in which the
Supreme Court has held that a statute does not
eliminate proximate cause without a clear indication
that Congress intended to do so. See, e.g., Pharms., Inc.
v. Broudo, 544 U.S. 336, 342–346 (2005); Holmes v. Secs.
Inv. Prot. Corp., 503 U.S. 258, 268–70 (1992); Associated
Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S.
519, 529–35 (1983). First, Congress signaled its
intention to eliminate proximate causation by the using
the words “due to” rather than “directly due to.” Second,
in those cases, the Supreme Court addressed statutes
that raised concerns about a plaintiff recovering from a
range of parties, including those who did not
proximately cause the plaintiff’s harm. See Pharms.,
Inc., 544 U.S. at 342–346 (securities fraud); Holmes, 503
U.S. at 268–70 (Racketeer Influenced and Corrupt
Organizations Act); Associated Gen. Contractors of Cal.,
Inc., 459 U.S. at 529–35 (Clayton Act); see also Lexmark
83a
Int’l, 572 U.S. at 132 (“[I]n all cases of loss, we are to
attribute it to the proximate cause, and not to any
remote cause.”). That concern is not present here.
Because the natural-disaster exception is an affirmative
defense, proximate cause serves no liability-limiting
function.
The Supreme Court has also held that the phrase
“because of” showed Congress’s intention to incorporate
but-for causation and cautioned courts against reading
more stringent causation requirements into statutes
that impose only but-for causation. See Bostock, 140 S.
Ct. at 1739 (“Congress could have taken a more
parsimonious approach. As it has in other statutes, it
could have added ‘solely’ to indicate that actions taken
‘because of’ the confluence of multiple factors do not
violate the law.”); Burrage, 571 U.S. at 216 (“Congress
could have . . . adopted a modified causation test tailored
to cases involving concurrent causes, . . . [but] chose
instead to use language that imports but-for causality.”).
The
unforeseen-business-circumstances
exception further suggests that Congress did not intend
to use proximate causation in the natural-disaster
exception. The unforeseen-business-circumstances
exception requires an employer to show that a “mass
layoff is caused by business circumstances that were not
reasonably foreseeable.” 29 U.S.C. § 2102(b)(2)(A)
(emphasis added). Numerous courts, including the
Supreme Court, have interpreted “caused by” to impose
a proximate-causation requirement. See Jerome B.
Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513
U.S. 527, 536 (1995) (“The Act uses the phrase ‘caused
by,’ which more than one Court of Appeals has read as
requiring what tort law has traditionally called
84a
‘proximate causation.’”); Kilburn v. Socialist People’s
Libyan Arab Jamahiriya, 376 F.3d 1123, 1128 (D.C. Cir.
2004) (interpreting “caused by” to require proximate
causation). While not explicitly mentioning proximate
causation, courts interpreting “caused by” in WARN Act
cases have generally required defendants to show that
an unforeseen business circumstance was the
immediate cause of a mass layoff. 11 See Gross, 554 F.3d
at 877–78 (“[The defendant’s] decision to shut down
came in the immediate wake of [its partner’s]
withdrawal . . . [even though] it had been suffering from
financial troubles for months.”); see also In re Jevic
Holding Corp., 496 B.R. 151, 164–65 (Bankr. D. Del.
2013) (“[T]he ‘immediate precipitant of the decision to
terminate employees’ was [the lender’s] refusal to
extend forbearance,” even though there were “other
reasons” for the lender’s refusal and the employer’s
financial difficulties).
The use of the phrase “caused by” in the
unforeseen-business-circumstances exception, but not
in the natural-disaster exception, suggests that
Congress intended to impose but-for, not proximate,
causation in the natural-disaster exception. See Keene
Corp. v. United States, 508 U.S. 200, 208 (1993)
Courts applying the unforeseen-business-circumstances
causation requirement to layoffs occurring after multiple causes
have typically held that the unforeseen business circumstances
do not need to be the sole cause of a plant closing or mass layoff,
but they must be the “straw that broke the camel’s back.” Gross
v. Hale-Halsell Co., 554 F.3d 870, 877–78 (10th Cir. 2009); see
also Jones v. Kayser-Roth Hosiery, Inc., 748 F. Supp. 1276, 1285
(E.D. Tenn. 1990) (an employer’s loss of its largest customer was
the “last straw” that made it economically infeasible to continue
operating the plant).
11
85a
(“‘[W]here Congress includes particular language in one
section of a statute but omits it in another . . . , it is
generally presumed that Congress acts intentionally
and purposely in the disparate inclusion or exclusion.’”
(quoting Russello v. United States, 464 U.S. 16, 23
(1983)). At least one other court has followed similar
reasoning in noting the different causation
requirements between the unforeseen-businesscircumstances exception in § 2102 and the strike
exemption in § 2103. See Teamsters Nat. Freight Indus.
Negot. Comm. ex rel. Howe v. Churchill Truck Lines,
Inc., 935 F. Supp. 1021, 1026 (W.D. Mo. 1996) (“In
contrast to the ‘business circumstance’ exception, the
‘strike exemption’ appears to place a less onerous
burden upon the employer who need only prove that the
closing ‘related’ to the strike, to be exempted from the
sixty-day notice requirement. Foreseeability and direct
causation are not at issue.”).
In sum, the WARN Act’s language, structure, and
legislative history, as well as case law interpreting
similar statutory language, support finding that the
natural-disaster exception uses but-for causation
standards. The COVID-19 pandemic need not be the
direct or sole cause of the layoffs for the natural-disaster
exception to apply.
2.
Economic Downturn in the Oil Industry
The parties agree that an economic downturn in
the oil business caused US Well Services to order a mass
layoff on March 18, 2020, but they sharply dispute
whether the but-for cause of that economic downturn
was the COVID-19 pandemic. The current record
86a
presents genuine factual disputes material to answering
that question.
But-for causation “is established whenever a
particular outcome would not have happened ‘but for’
the purported cause.” Bostock, 140 S. Ct. at 1739. The
“but-for test directs us to change one thing at a time and
see if the outcome changes”; “[i]f it does, we have found
a but-for cause.” Id. For example, “if a car accident
occurred both because the defendant ran a red light and
because the plaintiff failed to signal his turn at the
intersection, we might call each a but-for cause of the
collision.” Id. (emphasis in original); see also Burrage,
571 U.S. at 211 (“Thus, if poison is administered to a
man debilitated by multiple diseases, it is a but-for
cause of his death even if those diseases played a part in
his demise, so long as, without the incremental effect of
the poison, he would have lived.”).
The record does not clearly show that the COVID19 pandemic was the but-for cause of the economic
downturn in the oil industry as of March 18, 2020. Oil
prices were dropping before the COVID-19 pandemic
from a price war between Saudi Arabia and Russia.
(Docket Entry No. 21-1 at 7). One source states that oil
prices dropped below $30.00 per barrel, in early March
2020, immediately after the price war, because Saudi
Arabia was expected to “flood the market with crude in
a bid to recapture market share.” (Docket Entry No. 213 at 1). In January 2020, oil prices dropped slightly but
remained above $50.00 per barrel until the end of
February. (Docket Entry No. 21-1 at 7; Docket Entry No.
23-8 at 2). In a January 2020 report, the International
Energy Agency did not predict a drop in oil demand.
(Docket Entry No. 21-1 at 53). At the same time, some
87a
experts suggested a worst-case scenario of oil prices
dropping roughly $5 per barrel because of COVID-19.
(Docket Entry No. 23-8 at 4; Docket Entry No. 23-9 at
3). On March 9, 2020, the International Energy Agency
suggested that, using optimistic assumptions, shortterm oil demand might grow by “480,000 barrels a day.”
(Docket Entry No. 21-1 at 92). The Agency’s worst-casescenario prediction was a drop in demand of “730,000
barrels a day in 2020,” which was a small fraction of the
“99.9 million barrels a day” demand expected in 2020.
(Id.). The Agency also suggested that the worst effects
would stem from a drop in demand from China. (Id.).
The record does not clearly show the relative roles
of the price war and the COVID-19 pandemic in the
March 18, 2020, layoffs. In the termination letters US
Well Services provided the named plaintiffs, it stated
that the cause of the layoff was both “unforeseeable
business circumstances resulting from a lack of
available customer work caused by the significant drop
in oil prices and the unexpected adverse impact that the
Coronavirus has caused.” (Docket Entry No. 21-1 at 98).
But statements from the US Well Services CEO
following the mass layoff do not mention COVID-19.
(Docket Entry No. 22-5). US Well Services also
terminated employees before the vast majority of other
businesses that filed WARN notices with the State of
Texas. (Docket Entry No. 23-4 at 27). The US Well
Services Form 10-K for 2020 states that the company
contemplated “reductions-in-force” and furloughs in
February 2020, even though oil prices then hovered
around $50.00 per barrel and no COVID-19 national
emergency had been declared. (Docket Entry No. 23-2 at
28). The US Well Services Chief Administrative Officer
88a
stated in his affidavit that prices above $50.00 per barrel
were “commercially viable” in January and February of
2020. (Docket Entry No. 21-1 at 3).
The record evidence is disputed. Some evidence
supports the inference that the price decrease from the
price war between Russia and Saudi Arabia, before
March 18, 2020, may have had the largest effect on oil
prices and could be the but-for cause of the US Well
Services March 18 mass layoff. Some evidence also
supports an inference that COVID-19 may have had a
large effect on oil prices and on fracking-services
demand as of March 18, 2020. The size of the COVID-19
effect and the timing of that effect in relation to the US
Well Services mass layoff are questions that cannot be
answered definitively on the current record.
Both motions for summary judgment are denied.
IV.
Conclusion
US Well Services’ motion for summary judgment,
(Docket Entry No. 21), and Easom’s motion for summary
judgment, (Docket Entry No. 23), are denied.
Texas.
SIGNED on February 10, 2021, at Houston,
Lee H. Rosenthal
Chief United States District Judge
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APPENDIX E
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 21-20202
[Filed July 11, 2022]
SCOTT EASOM; ADRIAN HOWARD; JOHN NAU,
Plaintiffs—Appellants,
versus
US WELL SERVICES, INCORPORATED,
Defendant—Appellee
ON PETITION FOR REHEARING EN BANC
Before STEWART, CLEMENT, and ELROD, Circuit
Judges.
PER CURIAM:
Treating the petition for rehearing en banc as a
petition for panel rehearing (5TH CIR. R. 35 I.O.P.), the
petition for panel rehearing is DENIED. Because no
member of the panel or judge in regular active service
requested that the court be polled on rehearing en banc
90a
(FED. R. APP. P. 35 and 5TH CIR. R. 35), the petition for
rehearing en banc is DENIED.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.